Boycott effect? Chinese smartphone brands’ market share in India slips to 72%

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Published: July 25, 2020 7:45 AM

The pandemic and lockdown also impacted domestic smartphone market with shipments during April-June 2020 declining 51% y-o-y to a little over 18 million units

The pandemic coupled with anti-China sentiment severely impacted their market share, which declined for the first time in almost two years.

The Covid-19 pandemic and the lockdown, followed by anti-China sentiments in India on account of the border dispute seems to have severely dented the dominance of Chinese brands in the domestic market with their total market share falling sharply form an all-time high of 81% to 72% during the recently concluded April-June quarter of current calendar year.

According to Counterpoint Research, Chinese brands including Xiaomi, Oppo, Vivo and Realme controlled 81% of India’s smartphone market, which is their all-time high share. The pandemic coupled with anti-China sentiment severely impacted their market share, which declined for the first time in almost two years.

Counterpoint’s research analyst Shilpi Jain said, “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. This all resulted from India-China border dispute during June”. However, 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, she added.

“Additionally, in the era of globalisation, it is difficult to label a product based on country of origin as components are being sourced from many different countries. This development has given a window of opportunity for brands like Samsung and local Indian brands, like 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 vocal for local sentiment,” Jain added.

A top industry executive, who did not wish to be identified, said “Share of Indian brands shrunk from 16-18% in early 2015 to around 1% or even under as on date. Indians couldn’t capitalise on the change from 3G to 4G. Chinese grew on that base and then ate into Korean and US firms’ share. They haven’t looked back, till corona happened”.

The pandemic and lockdown also impacted domestic smartphone market with shipments during April-June 2020 declining 51% y-o-y to a little over 18 million units. The disruption in supply chain during lockdown was so pronounced that April was a complete washout in terms of shipments.

“Covid-19 pandemic wiped-out almost 40 days of production as well as sales of smartphones due to the nationwide lockdown. During May, the government allowed shops to open and online channel deliveries for non-essential items. As a result, the market witnessed a surge in sales as lockdown restrictions were slowly lifted,” said Prachir Singh, senior research analyst at Counterpoint.

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

However, the market is returning to normal with June shipments registering only a small decline of 0.3% Y-o-Y, helped by pent-up demand as well as a push from brands. Due to concerns over potential Covid infection, consumers prefer contactless purchasing and online channels. Smartphone brands are also recognising this trend by pushing more inventory to online channels, the agency pointed out.

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