India’s smartphone market saw the highest-ever second-quarter shipment of 36.9 million in the second quarter of 2019, with a 9.9 per cent year-on-year and 14.8 per cent quarter-on-quarter (QoQ) growth.
A total of 69.3 million mobile phones were shipped to India in Q219, a 7.6 per cent rise over the previous quarter.
"Despite the efforts towards multi-channel retailing by almost all vendors, the online channel continued its growth momentum fueled by multiple new launches, attractive offers and affordability schemes like equated monthly installments and 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 2Q19," Upasana Joshi, Associate Research Manager, Client Devices, IDC India said.
Offline channel 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 Indian Premier League (cricket league) and Xiaomi's growing multi-channel distribution.
The overall market Average Selling Price (ASP) stood at $159 in 2Q19 with 78 per cent of the market below $200 price segment. However, the fastest growing segment was $200-300 with 105.2 per cent YoY growth. This was mainly due to the demand from customers looking to upgrade, additionally fueled by China-based brands which are bringing innovations and flagship like design language at mid-price segments.
"The $400-$600 was the second-fastest-growing segment with 16.3 per cent YoY growth in 2Q19. OnePlus led this segment with a 63.6 per cent share at the back of newly-launched OnePlus 7 series. In the premium ($500 plus) segment, Apple bettered Samsung for the leadership position with an overall share of 41.2 per cent in the second quarter of 2019 as the iPhone XR demand saw an uplift after the price drop and aided by heavy promotional activities,” Joshi added.
The feature phone market continued its decline with 32.4 million-unit shipments, registering a 26.3 per cent drop during the reporting quarter on a YOY basis. This was due to lower shipments of 4G-enabled feature phones with 40.3 per cent YoY decline in 2Q19. 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.
Xiaomi saw its shipment volume grow by 4.8 per cent YoY during the quarter with Redmi 6A and Redmi Note 7 Pro as the highest shipped models in the overall market. Xiaomi also maintained its dominance in the online channel with a market share of 46.5 per cent, along with growing footprint in the offline channel which accounted for 39.5 per cent of Xiaomi shipments in 2Q19.
Samsung registered a strong 16.6 per cent YoY growth in 2Q19, fueled by newly launched Galaxy A series across low and mid-price segments. Galaxy A10 and A2 Core were amongst the top 5 models overall for the market. The vendor was also offering attractive channel schemes to clear the stocks of Galaxy J series. Galaxy M series (exclusive online till the end of 2Q19) saw price reductions which helped retain the 13.5 per cent marketshare in the online channel in 2Q19 for Samsung.
Vivo saw a strong YoY growth of 31.6 per cent in 2Q19. Its affordable model Y91 featured in the top 5 model lists nationally. vivo also launched its first exclusive online model "Z1 Pro" priced aggressively in $200-300 segment.
OPPO had a strong quarter with YoY growth of 41 per cent, because of affordable A series - A3s and the newly- launched A1K and A5s. Online channel accounted for 19.1 per cent for the vendor-driven by online exclusive model "K1".
Realme saw multifold growth YoY in 2Q19, driven by newly-launched model C2 and 3/3Pro series. The vendor was second in the online channel with 16.5 per cent marketshare in 2Q19, along with ongoing efforts for expansion in the offline channel which accounted for 21 per cent of its shipments in 2Q19.
Smartphone growth trajectory to continue
"India smartphone market will continue its growth trajectory in the second half 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 eTailers in the next few months fueled 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," Navkendar Singh, Research Director at Client Devices & IPDS, IDC India said.