One of the fastest growing mobile phone market in the world, India has recorded highest ever second quarter shipment of 36.9 million in the second quarter of 2019 (Q2CY19). As per the Asia/Pacific Quarterly Mobile Phone Tracker by IDC (International Data Corporation), total 69.3 million mobile phones were shipped to India in Q2CY19, up 7.6 per cent over the previous quarter. The quarter witnessed 9.9 per cent year-on-year (YoY) and 14.8 per cent quarter-on-quarter (QoQ) growth.
Navkendar Singh, Research Director, Client Devices & IPDS, IDC India observes, "India smartphone market will continue its growth trajectory in the second half of 2019, but the consolidation of top few brands will continue. This will make it much more challenging for smaller players to find niches of growth. A very strong 2H19 is essential to bring double-digit YoY growth in the fastest-growing smartphone market of this size globally. We should expect continued aggression by the online heavy brands and e-tailers in the next few months fuelled by new launches and price reductions of last few launches, leading up to the festive season in October. We will also see a much more competitive offline market play going forward, with all the major brands fighting for limited shelf space, which will make the retail channel very critical for any brand's success."
Top five players
Xiaomi continues to be the number one smartphone player as the shipment volume grew by 4.8 per cent YoY in Q2CY19 with Redmi 6A and Redmi Note 7 Pro as the highest shipped models in the overall market. The Chinese internet company has maintained its dominance in the online channel with 46.5 per cent market share, along with growing footprint in the offline channel accounting for 39.5 per cent of Xiaomi shipments in Q2CY19. Just recently, the company announced the opening of its 2000th exclusive Mi Store, helping the company grow in small towns and rural areas.
Riding on the success of the Galaxy A series across low and mid-price segments, Samsung made a comeback and registered a strong 16.6 per cent YoY growth in Q2CY19. Galaxy A10 and A2 Core were among the top five models overall for the market. Even the Galaxy M series (exclusive online till the end of Q2CY19) saw price reductions which helped retain the 13.5 per cent market share in the online channel in Q2CY19 for Samsung.
At number three, Vivo saw a strong YoY growth of 31.6 per cent in Q2CY19. OPPO, at number four, had a strong quarter with YoY growth of 41.0 per cent. Launched only in May 2018, Realme saw multifold growth YoY in Q2CY19, driven by newly launched model C2 and 3/3Pro series. The vendor was second in the online channel with 16.5 per cent market share in Q2CY19, along with ongoing efforts for expansion in the offline channel which accounted for 21 per cent of its shipments in Q2CY19.
Offline sales
Offline channel registered an 8.5 per cent YoY growth driven by the new launches in Samsung Galaxy A series, marketing activities by vivo during IPL (Indian cricket league) and Xiaomi's growing multichannel distribution.
"Despite the efforts towards multi-channel retailing by almost all vendors, the online channel continued its growth momentum fuelled by multiple new launches, attractive offers and affordability schemes like EMIs/cashbacks. This resulted in YoY growth of 12.4 per cent for the online channel with an overall share of 36.8 per cent in Q2CY19," says Upasana Joshi, Associate Research Manager, Client Devices, IDC India.
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Market ASP
The overall market ASP (average selling price) stood at $159 (approx. Rs 11,500) in Q2CY19 with 78 per cent of the market below $200 (approx. Rs 14,300) price segment. However, the fastest growing segment was $200-300 (approx. Rs 14,300 to Rs 21,500) with 105.2 per cent YoY growth. This category saw multiple launches from players such as Xiaomi, Samsung, Honor, Asus and HMD Global. This was mainly due to the demand from customers looking to upgrade their phones, additionally fuelled by China-based brands, which are bringing innovations and flagship like design language at mid-price segments.
The report states that $400-600 (approx. Rs 28,500-43,000) was the second-fastest-growing segment with 16.3 per cent YoY growth in Q2CY19. OnePlus led this segment with a 63.6 per cent share at the back of newly launched OnePlus 7 series. In the premium $500 (approx. Rs 36,000) segment, Apple bettered Samsung for the leadership position with an overall share of 41.2 per cent in Q2CY19 as the iPhone XR demand saw an uplift after the price dropped and promotional activities picked up.
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Decline of feature phones
On the other hand, the feature phone market continued its decline with 32.4 million-unit shipments, registering a drop of 26.3 per cent YoY in Q2CY19. This was due to lower shipments of 4G-enabled feature phones with 40.3 per cent YoY decline in Q2CY19. The 2G feature phone segment also declined as challenges remain for Indian brands along with small players facing heat owing to duty hikes on imports.