COVID-19 impact: India saw a massive 19 decline in smartphone shipments in March 2020

The past two months saw no activity whatsoever in the smartphone market because of the ongoing lockdown in India. Counterpoint Research data indicates that the smartphone market in India grew at 4% YoY in Q1 2020. Shipments surged in January and February as compared to last year, and then came crashing with a 19% drop due to the COVID-19 pandemic. Xiaomi, Vivo and Samsung now command the top three positions in the market, while Realme, Oppo and Apple are the fastest-growing OEMs.

Despite stiff competition from Xiaomi and other Chinese brands, strong sales of the iPhone 11 and multiple pricing promotions saw Apple’s market share surge in Q1 2020. The analyst firm claims, Apple was third-fastest growing brand in India with a whopping 79% growth. In the second position is Oppo with 83% YoY growth while Realme is the fastest growing with a 119% growth in shipments, YoY in Q1 2020.

How did the Indian smartphone market perform in Q1 2020?

Apple also topped the charts in the ‘ultra-premium segment’ with a majority 53% market share. Yet, Apple still doesn’t command a major share of the pie in the overall market. Xiaomi, Vivo and Samsung are the top three overall.

Xiaomi led the market with a 30% market share in Q1 2020,  showing a 6% growth YoY, driven by a strong performance of the Redmi Note 8 series along with offline expansion, affordable pricing and more. Vivo also grew by 40% YoY in Q1 2020, surpassing Samsung, driven by the strong performance of the Y-series. Counterpoint notes that Vivo exited the quarter with low inventory which will help the brand in planning new launches once the lockdown lifts. The company was supposed to launch the Vivo V19 in India in March.

Samsung fell to the third position with new launches targeting diverse price tiers. The Korean giant’s growth saw a sharp 84% decline YoY owing to a decline in shipments in the sub 10K segment which was dominated by Xiaomi, Realme and Vivo.

Realme and Oppo are the next success stories in India with a healthy 119% and 83% YoY growth respectively. Poco also re-entered India as an independent brand and capture 2% market share in March 2020. Poco was one of the top 5 brands in the 15-20K segment.

Expect growth to pick up from Q3 2020

Counterpoint Research data indicates the Indian smartphone market grew in January and February with new launches and aggressive promotions. However, March saw a steep decline of 19 per cent, restricting overall growth to 4 per cent this quarter. The report states “any signs of recovery will likely only start from the third quarter onwards. As a result, we are estimating that overall smartphone shipments will decline by 10% for the full calendar year.”

Commenting on the market dynamics, Prachir Singh, Senior Research Analyst at Counterpoint Research said, “The COVID-19 effect on India was relatively mild until mid-March. However, economic activities declined as people save money in expectation of an extended period of uncertainty and an almost complete lockdown. Almost all smartphone manufacturing has been suspended. Further, with the social distancing norms, factories will be running at lower capacities even after the lockdown is lifted. Consumer demand will have a larger impact on smartphone sales, as people will focus on saving and therefore limit discretionary purchases. As entry-level smartphone consumers will be the worst-hit by the lockdown, the demand for the entry-level smartphones will decline in the near-term. We believe demand will shift to the second part of the year. Even if the situation stabilizes by mid-year, people may hold-off purchasing until the festive season.”

OEMs will need a lot of work to restart operations once the lockdown is lifted. They will have to manage existing inventory across their distributor and retail network, helping retailers sell off the older inventory. Factory production will also struggle to hit full capacity with social distancing norms in place. Furthermore, the lockdown may only lift in areas marked as green zones. Brands will have to restructure their strategies to focus more on green zones and drive sales in non-affected areas.

You can read the full report here.

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