Irrespective of the component supply constrain and nationwide lockdown due to the outbreak of COVID-19 in India, the Indian smartphone market grew 4 per cent year-on-year in Q1, 2020. The modest growth was on the back of good consumer demand before the onset of COVID-19 hit the market. However, in Q2 2020, it is anticipated that the COVID-19 impact will be at its peak for the smartphone industry.
"With no shipments in April, smartphone shipments will potentially decline by as much as 48 per cent QoQ. COVID-19 will lead to fundamental, and possibly, permanent behavioural changes in the way people shop, consume media and how they regard the brands they do business with. In a mobile-first nation, the importance of the mobile cannot be over-emphasised. That's why mobile brands need to go the extra mile to ensure business continuity, as well as safety of all stakeholders - retailers and consumers alike. The new O2O initiatives introduced by the likes of Xiaomi, Samsung, Vivo and Oppo to cater to their customers is a welcome move. While these new strategies may seem transient, chances are that they will take permanence as we move ahead," says Prabhu Ram, Head-Industry Intelligence Group, CMR.
According to CMR's India Mobile Handset Market Review Report for Q1 2020, Xiaomi continued to dominate the smartphone space with 30 per cent market share, both in Q1 2020 and in Q1 2019. However, given the year-on-year growth, it registered a 3 per cent increase in the number of units. Vivo managed to topple Samsung for the second position by gaining 17 per cent share in Q1 2020, up from 12 per cent of Q1, 2019, registering a massive 45 per cent increase in units. Samsung dropped to third position with the share falling to 16 per cent in Q1, 2020 from 28 per cent last year with a 41 per cent decline in the units. Realme and Oppo, at number four and five, registered positive growth with the former registering 149 per cent unit growth and latter 82 per cent.
At the beginning of the year, COVID-19 was merely a supply-side challenge confined to China. Smartphone brands in India were able to tide over the initial wave of the crisis with enough inventory supplies. However, as COVID-19 cases in India crossed the 500-mark in late March, India went into a complete lockdown. "For smartphone brands, this has put both supply as well as demand in a state of uncertainty. Q2 2020 will be where the industry will face the brunt of the pandemic and test the resilience of smartphone brands," adds Prabhu.
"Faced with personal and economic uncertainties, consumer spending will remain muted for the better part of the year. Unless absolutely necessary, such as replacing a mobile phone, consumers may choose to conserve. However, we expect the market to recover lost ground in the run-up to the festive season," adds Anand Priya Singh, Analyst- Industry Intelligence Group, CMR.
Given the current situation, the best-case scenario suggests a decline of 11-12 per cent in overall smartphone shipments for 2020.
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