India has dethroned USA to become second largest smartphone industry
Finally, it happened. India is now the second largest market for smartphone makers in the world. According to Counterpoint Research, Indian smartphone industry reached 158 million shipments in 2019 with 7% YoY growth. Explosive growth in midrange segment and strong festive sales in second half of the year helped India zoom past USA in smartphone shipments.
The irony though is that there is not even a single Indian smartphone brand in top 5. This industry is now completely dominated by the Chinese brands. Thanks to them bringing flagship grade features to midrange phones, more and more consumers are now going for new phones to stay relevant.
Xiaomi managed to keep top spot from Samsung. The big winner here was Realme, with 255% YoY growth. If you consider all BBK brands as one (Realme, Oppo, Vivo, OnePlus), their marketshare would be nearly 40%.
Commenting on the market dynamics, Tarun Pathak, Associate Director, said, “Although the rate of growth for the smartphone market was only single digit for the first time on an annual basis, India is underpenetrated relative to many other markets; 4G penetration among subscribers being around 55%. Going forward, we expect this demand to grow further due to the ongoing transition from feature phones to smartphones and progressive diffusion of key smartphone features to the entry-level price tier as a result of hyper-competition among multiple players. We further expect brands to have multi-tier strategies involving partnerships in the mobile ecosystem from hardware, software and services, thus creating opportunities within different segments like entertainment, gaming, financial services and more.
Commenting on the competitive landscape, Anshika Jain, Research Analyst at Counterpoint Research said, “Chinese brands’ share hit a record 72% for 2019 compared to 60% a year ago. During 2019 we have seen all major Chinese players expanding their footprint in offline and online channels to gain market share. For example, Xiaomi, realme, and OnePlus have increased their offline points of sale, while brands like Vivo have expanded their online reach with Z and U series. 2019 also marked the fifth anniversary in India for some OEMs. Several have seen significant growth from their first full year of operation. For example, over the past four years, Xiaomi, Vivo, and OnePlus have grown 15x, 24x, and 18x respectively. This highlights that OEMs are mature enough to capture the next wave of growth and further expand their operations in India.
