The latest Counterpoint research on India’s smartphone market is out and the results are not surprising. The research firm highlights in its fresh report that the Indian smartphone market is flourishing with an improvement seen in the online smartphone shipment market.
According to the latest numbers, the overall online smartphone shipments grew 23 percent annually, faster than the overall smartphone market in CY 2017. The contributing factors include sale events, aggressive promotions by brands, and value for money offerings by manufacturers such as Xiaomi and Lenovo.
The Indian smartphone market is the one dominated by the price-conscious consumers and it is exactly where the market sees growth. As Research Analyst at Counterpoint Research, Karn Chauhan, points, “The high-spec but low-cost, value for money smartphone models exclusively available only on online platforms were instrumental in successfully creating unprecedented demand throughout the year. The demand for such models was felt not only in online but offline channels as well due to walk-in customers asking for attractive models such as the Redmi Note 4. This has sparked an obvious channel extension strategy move to expand offline and capture the pent-up demand which is helping vendors such as Xiaomi which are able to offer such attractive models. In 2018, many brands will learn from Xiaomi’s growth from online to offline and will try to replicate a similar strategy.”
Xiaomi, which recently recorded market share higher than that of long-term winner Samsung, opened its first Mi Home store in India in May last year. The company now plans to extend its offline presence with 100 such stores in the next two years. Prompted by the success, OnePlus announced its first offline store in India in January this year.
In terms of online smartphone shipment market share by platforms, homegrown Flipkart acquired the maximum share with 51 percent, followed by Amazon India at 33 percent and Xiaomi’s mi.com at 10 percent. In terms of market share by brands, Xiaomi remained undefeated with 44 percent market share. Close second was Lenovo (including Motorola) at 18 percent, Samsung at 15 percent, and Huawei and Micromax at 3 percent each. Micromax is the only homegrown brand to list among the top five brands.
The findings further state that Flipkart and Xiaomi grew the overall smartphone demand whereas Amazon and OnePlus grew the demand in premium segment across online channels throughout the year. For Xiaomi, its top volume drivers were the Redmi Note 4, Redmi 4, and Redmi 4A.
Commenting on the competitive landscape, Tarun Pathak, Associate Director at Counterpoint Research said, “Online channel contributes to more than one-third of the total smartphones shipped in India during the year, which is the highest in the world. Flipkart led the online smartphone channel capturing more than half of the market in both volume and value terms maintaining its lead with Amazon. However, Amazon also able to grow share capturing almost one-third of the market in volume and value terms. Indian online channel market has become a duopoly with Flipkart and Amazon capturing a combined 84 percent of the total volume and 87 percent of the total value.”
Counterpoint estimates that share of online channel continues will remain flat in 2018 as brands are adopting hybrid channel (Online+Offline) strategy to extend their reach throughout the country. Interestingly, the research also charts the growth of Paytm which also runs its own e-mall. According to the report, Paytm witnessed modest growth in 2017, attributed to the huge discounts offered on high-end smartphones like Apple iPhone.
Lastly, in terms of online smartphone revenue market share by brands, Xiaomi acquired 36 percent of the share, followed by Samsung, Lenovo, and Apple at 17 percent each, and OnePlus acquiring 6 percent share for CY 2017.