In India’s dynamic smartphone market, 2019 threw up a number of surprises. The Chinese brands held their ground, growing in market share. Samsung not only dropped in the rankings, but also had to deal with a resurgent iPhone in the premium segment. And offline sales suffered a setback.
By Upasana Joshi
According to the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, India’s smartphone market shipped 152.5 million units in 2019, with a modest 8 per cent YoY growth. India also became the second largest smartphone market in 2019, after China, still ahead of the US.
However, the overall mobile phone market, with annual shipments of 282.9 million units, fell by 12.3 per cent YoY in 2019, due to fewer 4G feature phones.
The year 2019 also witnessed longer inventory cycles in the offline channel as online-exclusive models held back offline sales. This resulted in a meagre 1.6 per cent annual
growth in 2019 in the offline channel.
The online growth momentum continued through the year with a record share of 41.7 per cent in 2019, growing by 18.4 per cent YoY annually. This was due to deep discounts, cashback offers, buyback/exchange schemes, and ‘complete protection’ offers, clubbed with attractive financing schemes like ‘no cost EMIs’ across major model line-ups and brands.
Smartphone ASPs (average selling price) stood at US$ 163 in 2019, registering a 2.8 per cent YoY growth with the sub-US$ 200 segment still accounting for 79 per cent of the market.
The mid-range segment of US$ 200-500 accounted for the strongest YoY growth of 55.2 per cent, accounting for 19.3 per cent of the overall smartphone market. In the mid-premium (US$ 300-500) segment, Vivo continued to lead the market with a 28 per cent share in 2019, on the back of thehigh-selling Vivo V15 Pro, followed by OnePlus at a 20.2 per cent share, owing to the popularity of the One- Plus 7 model. In the premium (US$ 500+) segment, Apple surpassed Samsung for the leadership position with a market share of 47.4 per cent in 2019, driven by aggressive price drops on previous generation models, bank offers on debit/credit cards, strong eretailer sales momentum, and a lower iPhone 11 launch price compared to the iPhone XR.
A total of 36.9 million smartphone units were shipped in Q4 2019 in India, registering a 5.5
per cent YoY growth, but a 20.8 per cent quarter-on-quarter (QoQ) fall. Usually, the third quarter sees heavy channel loading in preparation for the Diwali festive season, and the last quarter of the year sees a cyclical dip as channels focus on clearing leftover inventory. Owing to multiple rounds of sales by eretailers beyond the festive quarter continuing into December, the online channel registered 11.2 per cent YoY growth in Q4 2019 with a share of 43.3 per cent. However, offline shipments remained flat with 1.4 per cent YoY growth in Q4 2019.
The ASP for Q4 2019 stood at an all-time high of US$ 172, as shipments in the US$ 200-300 segment grew by 71.9 per cent YoY on the back of the fast-selling Galaxy M30s and Vivo S1, while strong shipments of the newly launched iPhone 11 series drove the US$ 700 and above segment. In the mid-premium (US$ 300-500) segment, in Q4 2019, OPPO surpassed OnePlus for the leadership position (with a share of 26.8 per cent and 24.4 per cent, respectively), with the fast-moving Reno 2 series. In the premium (US$ 500+) segment, Apple reached a record 75.6 per cent market share.
In Q4 2019, the feature phone segment continued to decline YoY by 21.1 per cent with shipments of 30.1 million units. However, the Diwali offer (₹ 699) launched by Reliance Jio in October 2019 helped clear off existing channel inventories of 4G-enabled Jio phones. Xiaomi became the largest mobile phone brand in Q4 2019 (ahead of Samsung and Reliance Industries) with a market share of 16 per cent and YoY growth of 15.9 per cent.
The top five smartphone vendors – highlights
Xiaomi registered annual shipments of 43.6 million units in 2019, the highest smartphone shipments made by any brand in a year, ever, with a growth of 9.2 per cent YoY.
The Redmi Note 7 Pro and Redmi 6A were the highest shipped devices nationally in 2019. Xiaomi continued to dominate in Q4 2019 on the back of the newly launched Redmi Note 8 Pro/8A/Note 8/8 series.
Vivo climbed to the second slot, surpassing Samsung with massive YoY growth of 96.5 per cent in Q4 2019. It also became the leader in the offline channel, ahead of Samsung, due to multiple price drops across major models in November/December 2019 to clear off inventory post-Diwali, clubbed with attractive channel schemes in Q4 2019. The continued focus on its offline channel, despite the exclusive line-up of models on the online channel and its presence across price segments, led to Vivo’s phenomenal rise in 2019.
Samsung slipped to third position, registering declining shipments amongst the top five brands with a 15.4 per cent YoY fall in Q4 2019. The refreshed Galaxy A series was
unable to sustain its momentum owing to a delay in the time of launch, a gap in phasing out the older Galaxy A as well as fewer channel incentives.
However, its Galaxy M series, particularly Galaxy M30s, performed well in the online segment, helping to revive Samsung’s online share in Q4 2019 to an all-time high of 16.6 per cent. Despite the attractive cashback offers in the premium (US$ 500+) segment, Samsung faced heat from offerings by Apple, leading to channel inventories.
OPPO climbed to the fourth position in Q4 2019, with a huge YoY growth of 88.4 per cent on the back of its affordable A series and successful Reno 2 series. The company remains upbeat about the offline channel, which it has backed with incentives and offerings as well as spending on marketing initiatives.
realme slipped to the fifth position in Q4 2019, in spite of a YoY growth of 74.1 per cent. It continued to be in the second slot in the online channel with a market share of 18.1 per cent in 2019, up by 10 percentage points compared to 2018. The realme C2 featured in the ‘Top 5 models’ list in the online channel in 2019. Its newly launched X2 Pro became the highest shipped device in the midpremium US$ 300-500 segment in Q4 2019.
The author is an associate research manager at IDC India.
