India's smartphone market hits record 53 million units in Q3, Samsung reclaims top spot: Counterpoint

Smartphone segment in India rebounded after the lockdown to touch an all-time high of 53 million units in the September quarter, with Samsung toppling Xiaomi from the number one spot, according to research firm Counterpoint.

India's smartphone shipments grew 9 per cent year-on-year to reach over 53 million units in July-September 2020 quarter - the highest-ever shipment in a quarter for the Indian smartphone market, Counterpoint said.

"The push from the brands coupled with the pent-up demand due to the lockdown and strong sales on online platforms led to this growth. Consumers are still preferring online platforms due to Covid-19 fears," it added.

Samsung led the smartphone market with a 24 per cent share, followed by Xiaomi (23 per cent), Vivo (16 per cent), Realme (15 per cent) and Oppo (10 per cent).

Counterpoint said Samsung became a leading brand in the Indian smartphone market after two years with 32 per cent year-on-year growth, and the strong performance was the result of multiple strategies, including effective supply chain and touching various price points through new launches.

Samsung's aggressive push in online channels, with the highest ever online contribution within its portfolio, also helped it regain its number one spot, it added.

Xiaomi slipped to number two position for the first time since Q3 2018 with 4 per cent y-o-y decline.

"Manufacturing constraints due to the Covid-19 situation affected its supply chain, leading to a supply-demand gap. With ramped-up manufacturing, strong demand for the Redmi 9 and Note 9 series, aggressive product strategy and growing offline presence, we believe Xiaomi will come back strongly in the coming quarter," the report said.

Counterpoint Research Analyst Shilpi Jain said during the start of the quarter, there were some anti-China consumer sentiments, impacting sales of brands originating from China.

"However, these sentiments have subsided as consumers are weighing in different parameters during the purchase as well. The brands have been quite aggressive as they started building up inventory much ahead of the festive season. Focus on online channels has been increasing due to the Covid-19 situation," she added.

Jain said even the offline-centric brands like Vivo, Oppo and Itel are increasing their online presence due to the changing consumer behaviour.

"Though online channels remain in focus, OEMs are also trying to leverage new opportunities in offline channels in tier II and III cities... Additionally, the brands are focussing on affordability by announcing cashback, promotions and offers on devices," she added.

Jain said on the manufacturing front, the Indian government is focusing on increasing the local value addition.

"Mobile handset production is likely to increase in the coming time as schemes like Production Linked Incentive (PLI) start to impact the overall electronic manufacturing ecosystem. Indian brands like Micromax and Lava are expected to leverage the government's 'Aatmanirbhar Bharat' initiative and plan their comeback," she said.

The overall mobile handset market (smartphone and feature phone) grew 8 per cent y-o-y in the third quarter due to stronger consumer demand in the smartphone segment and stronger sales of feature phones.

The feature phone market registered a 5 per cent y-o-y growth in the said quarter, with Itel at the top spot, followed by Samsung and Lava.

Samsung led the overall market as well with a 22 per cent share, followed by Xiaomi (14 per cent), Vivo (11 per cent), Realme (10 per cent) and Itel (8 per cent).

"The Indian smartphone market is on a recovery path as the lockdown restrictions have been relaxed. The market has shown consistent growth for the last few months. It saw strong demand during the Independence Day period in August as major online platforms hosted massive sales," Counterpoint Senior Research Analyst Prachir Singh said.

September has always been a high sell-in month as brands prepare for the upcoming festive season and push stock in the channels, he added.

"Almost all the brands recorded growth compared to the last year. In terms of price bands, the mid-tier (Rs 10,000–20,000) segment registered the highest growth and reached its highest ever share in a quarter. Due to the pandemic, Indian consumers have ended up saving on leisure activities," he said.

These savings are now being funnelled into smartphone purchases. Additionally, smartphones have become an integral part of consumers' lifestyle in this changing environment, he noted.

Transsion Group brands (Itel, Infinix and Tecno) regained their market share in the September quarter, registering 73 per cent y-o-y growth.

Apple led the premium segment (Rs 30,000 and above) surpassing OnePlus even before its flagship launch.

OnePlus remained the top brand in the affordable premium segment (Rs 30,000-45,000), driven by OnePlus 8 sales.

Counterpoint said a Basic Customs Duty (BCD) of 10 per cent was announced on display modules and touch panels, which will be effective from the next quarter.

This move by the Indian government will impact the cost of production since displays are majorly imported. But, it will boost the overall handset manufacturing ecosystem and local sourcing contribution, in the long run, it added.