Samsung, Micromax Top Smartphone Vendors in India, Online Sales Push Growth

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First quarter of 2015 surprisingly witnessed Smartphone sales shrink by 7 percent, while the total mobile phone market fell by whopping 15 percent. For a fast growing market like India, this was something quite unexpected. However, smartphone sales figures second quarter of 2015 will bring cheers to Indian smartphone vendors. According to IDC report for 2Q2015, smartphone shipments grew by 19% thanks to better than expected online sales.

The overall mobile market however, remained sluggish and fell by 6 percent in the second quarter of 2015 on a year-on-year (YOY) basis. Mobile manufacturers in India only shipped 59.4 million units in 2Q15 compared to 63.2 million units shipped in the second quarter of 2014.

The better than expected Smartphone sales came about due to vendors using online retail, or eTail, to penetrate the market. According to Kiran Kumar, research manager at IDC, “eTailers have opened additional avenues for growth for many vendors in India, who would have otherwise struggled to get a hold in the complex distribution network. The share of smartphone shipments through eTailers increased for most of the key vendors in Q2”

Rise of Chinese Vendors

While Samsung remained the market leader, much of their market share in recent times has been eroded due to rise of Chinese smartphone vendors in India. In just one quarter, Chinese vendors like Lenovo, Xiaomi, Huawei and Gionee doubled their market share in India and tripled compared to a year ago. Chinese vendors now account for 12 percent of total Indian smartphone market share.

Most of these Chinese vendors were helped by launch of value of money handsets in sub $150 category and the fact that they could immediately launch their phones through online sales channels, though they lacked a large traditional distribution network, which takes time and effort to setup in a country like India.

Indian Smartphone Market Share 2Q2015

Differences – Indian & Chinese Smartphone Markets

  1. In the latest quarter, almost one-fifth of the smartphones sold in China were sub-US$100, while in India almost 50% of all smartphones shipped during the same period were in this price segment;
  2. Apple has 19 Apple Stores in China at present, whereas India doesn’t have any Apple Store
  3. The high-end Galaxy S6 and S6 Edge had a small contribution to the total Samsung smartphone sales in India, but a considerably larger contribution in China;
  4. Unlike China, Indian consumer are not expected to make a quick switch to a smartphone from feature phone

IDC in their report have mentioned that India is expected to keep up their double-digit growth rate for next few years. With such growth, India is expected to overtake the United States as the second largest smartphone market globally by 2017.

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