The contribution of Chinese brands in India’s smartphone market dropped to 72% in the quarter ended June compared to a peak of 81% in the first three months of 2020, as leading brands such as Oppo, Vivo and Realme faced supply crunch amid rising anti-China sentiment, according to market researcher Counterpoint Research.
The slump in the contribution of Chinese brands came on the back of a big decline in smartphone shipments during the quarter, which fell 51% year-on-year to just over 18 million units, owing to the complete suspension of manufacturing facilities and sales during the first 40 days of the lockdown, the market researcher added.
“The Covid-19 pandemic wiped out almost 40 days of production as well as the sales of smartphones due to the nationwide lockdown,” said Prachir Singh, Senior Research Analyst at Counterpoint Research, adding that the lifting of the lockdown saw a surge in sales of smartphones.
By June, smartphone sales had recovered, registering only a 0.3% decline on a yearly basis.
Samsung was the biggest beneficiary in terms of clawing back its market share. The smartphone maker recorded 26% market share in the April-June period compared to just 16% in the first quarter of the calendar year. The biggest losers included Realme, which saw its share drop to 11% in the second quarter from 14% in Q1, and Oppo, whose market share plunged to 9% in Q2, compared to 12% in Q1.
“This was mainly due to the mixture of stuttering supply for some major Chinese brands such as Oppo, Vivo and Realme, and growing anti-China sentiment that was compounded by stringent actions taken by the government to ban more than 50 apps of Chinese origin and delay the import of goods from China amid extra scrutiny,” said Shilpi Jain, Research Analyst at Counterpoint Research.
However, the attractive value for money and strong channel entrenchment of Chinese smartphone brands in India leaves few other options for consumers to choose from. Counterpoint did cite that the current scenario certainly is an opportunity for brands such as Samsung and also local players such as Lava and Micromax to claw back market share.
Ecommerce, which made up 45% of all sales of smartphones in the April-June quarter, its highest ever level, did not witness a very noticeable movement away from Chinese brands. Executives that ET spoke to at leading online retailers said that there were hardly any non-Chinese options for consumers in the smartphone segment.
“What other option do consumers have? There’s Samsung and Apple, but that’s about it. In the sub-Rs 15,000 market which is the most popular category, the offerings from the Chinese are so much better and more abundant that consumers even if they wanted to boycott Chinese goods, can’t,” said a senior executive who pleaded anonymity.
The person added that unlike in other categories where the Chinese contribution isn’t so high, consumers have been looking for ‘Made in India’ products, following the Prime Minister’s clarion call to support local businesses in May. Further movement in this direction was seen after the flaring up of border tensions between India and China in June.
“A lot of people are searching for ‘Made in India products, that’s clear, but in smartphones they don’t really find anything that fits that bill,” added another ecommerce executive.
While the shift away from Chinese smartphone brands might not be sustainable unless more Indian and non-Chinese brands step up, the overall smartphone market did see one big positive during the quarter with India’s overall smartphone user base growing to over 500 million for the first time.