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India’s smartphone market grew only 2 per cent in the first quarter of calendar year 2022 from the same period last year, according to a report by Canalys, an independent analysis agency.
As per the report, vendors shipped 38 million smartphones in India in the quarter ended March 21, 2022, with leading vendors suffering from intermittent supply issues.
According to Canalys Analyst Sanyam Chaurasia, “This is not a great start to the year for a market like India, which has seen double-digit percentage growth even during the pandemic.”
Supply constraints
“While most of the world’s markets battled the third wave of Covid-19 in Q1, the relatively weaker impact on India should have helped growth return quickly. But supply remained the biggest challenge for leading vendors such as Xiaomi and Vivo, and they struggled to secure components for their volume-driving low-end models. In contrast, brands such as Realme, Tecno and Itel did remarkably well with solid supply to take on market leaders and fulfill low-end demand,” Chaurasia said.
Xiaomi, though it faced another quarter of sequential decline, remained in the top spot with 21 per cent market share, recording eight million shipments during the quarter. Samsung came second with 6.9 million units shipped and an 18 per cent market share, while realme witnessed the most vigorous growth among the top five vendors. Its shipments grew 40 per cent year-on-year to 6.0 million units as the brand held a 16 per cent market share in the quarter. Vivo and Oppo completed the top five with 5.7 million and 4.6 million units shipped and 15 per cent and 12 per cent market share, respectively.
According to Chaurasia, vendors are taking steps to address the supply bottleneck.
“Sell-in started to improve from March. Channel companies are optimistic about healthy sell-in in Q2 CY2022, with vendors preparing for a strong festive quarter. They are finding opportunities in lower-tier cities and towns in India where device penetration is still relatively low. It is more important than ever for vendors to focus on building a long-term offline channel strategy,” he added.
Affordability challenge
As per the Canalys analyst, the biggest challenge faced by vendors in 2022 will be maintaining device affordability amid increasing oil prices and rising inflation.
“Volatility in foreign exchange rates and higher operational costs due to inflation will, in turn, put further pressure on vendors to maintain profitability. But as consumers increasingly rely on their smartphones, enticing them with payment schemes has never been easier with multiple buy-now-pay-later partners mushrooming across the ecosystem,” Chaurasia said.
“The mass market will remain India’s growth engine, and having a healthy portfolio in the mid-to-low-end segment will be key to maintaining strong consumer mindshare in 2022. Availability, affordability and attractiveness will be essential for smartphone vendors to succeed as multiple uncertainties lie ahead,” he added.
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