Chinese smartphone brands’ share decline to 72% in Q1 due to anti-China sentiment, supply issuesNEW DELHI: The contribution of Chinese smartphone brands fell to 72% from 81% in Q1 2020, mainly due to the mixture of stuttering supply for some major Chinese brands such as Oppo, Vivo, and Realme, and growing anti-China sentiment. The sentiment also led to stringent actions taken by the government to ban 59 apps of Chinese origin and delay the import of goods from China amid extra scrutiny.

According to Counterpoint Research, India’s smartphone shipments declined by 51% year-on-year to just over 18 million units in April-June quarter of 2020, majorly impacted by the nationwide lockdown imposed by the Indian government to combat COVID-19 which resulted in zero shipments during April, Counterpoint Research said.

While the share of Chinese brands fell in the quarter, Shilpi Jain, Research Analyst at Counterpoint Research said that local manufacturing, R&D operations, attractive value-for-money offerings and strong channel entrenchment by Chinese brands leaves very few options for consumers to choose from.

“… in the era of globalization, it is difficult to label a product based on country of origin as components are being sourced from many different countries,” she said.

This development has given a window of opportunity for brands like Samsung and local Indian brands such as Micromax and Lava, to recapture market share. Further, Jio-Google’s partnership to bring a highly affordable 4G Android smartphones could also gain ground, banking on the growing #VocalforLocal sentiment, Jain added.

The quarter was marred by both demand and supply constraints which led brands to rethink their go-to-market strategies.

The agency said that the market is starting to return to normal with June registering a mild decline of 0.3% year-on-year. The pent-up demand along with a push from handset brands helped in the month of June.

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“The COVID-19 pandemic wiped-out almost 40 days of production as well as the sales of smartphones due to the nation-wide lockdown,” Prachir Singh, Senior Research Analyst at Counterpoint Research said.

“On the supply side, the factories were shut down in April and started operating in May, which resulted in supply shortages for some manufacturers. Some brands maintained the supply of their products by importing fully assembled handsets,” he said

Additionally, the last week of the quarter saw components being held up at customs, which also impacted the supply chain.

Online channel share reached the highest ever level, accounting for almost 45% of sales, a second-quarter record. Consumers preferred contactless purchases and social distancing.

India is home to more than 350 million feature phone users and the feature phone market was the worst affected segment as it declined by a massive 68%year-on-year in Q2 2020 as consumers in this highly cost-sensitive segment tried to save money by reducing discretionary purchases.

In the near-to-mid term, this could actually boost the used and refurbished mobile phone market, Counterpoint said.

Xiaomi continued to lead the Indian smartphone market in Q2 2020 with 29% share, followed by Samsung which increased its share by a percentage point to 26%, displacing Vivo from the second slot. Vivo held 17% share in the quarter.

Realme and Oppo cornered 11% and 9% share, respectively in the quarter.

OnePlus regained its top position in the premium market (Rs 30,000 and above) with its newly launches OnePlus 8 series, which also comes with 5G.

Apple remains the leading brand in the ultra-premium segment (Rs 45000 and above) driven by iPhone 11 shipments, though it lost some share to OnePlus in Q2.

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