comscore Xiaomi narrows gap with Samsung as India’s smartphone market grows at 12% in Q1 2017: Canalys

Xiaomi narrows gap with Samsung as India’s smartphone market grows at 12% in Q1 2017: Canalys

No Indian smartphone brand makes to Canalys’ top five for the first quarter of 2017.


Research firm Canalys has released its latest data on the Indian smartphone market. According to its report, India s smartphone market grew by 12 percent year-on-year in the first quarter of 2017, with shipments of more than 27 million units. No Indian smartphone brand has made it to the top-five list though. While Samsung leads the table with 22 percent share, Xiaomi is closing on with 14 percent share and also happens to be at the second spot. Also Read - Redmi Note 11T 5G launch on November 30: Expected price in India, specs, and more

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Vivo grabbed the third spot with 11 percent share, whereas OPPO and Lenovo both had 9 percent share in the first quarter of 2017. According to the research agency, Samsung maintained its lead with over 6 million units shipments, though the shipments of the budget smartphones Galaxy J-series smartphones to offline distribution partners also played a key role. Also Read - Oppo Find N 5G could launch as Oppo's first foldable smartphone next month

Xiaomi, on the other hand, continued the momentum from the previous quarters and shipped around 4 million units. It accounted for 14 percent of shipments, which is 3 percent higher than what it had one year ago. Xiaomi s success in India is underscored by its online go-to-market strategy. Demonetization seems to have had no impact on it, as its target customer is young, Internet-enabled and primarily buys online, said Canalys Research Analyst Ishan Dutt.

Vivo also touched the double digit figure this quarter. With 10 percent share, it registered a 36 percent growth in sequential shipments. Vivo was just shy of shipping 3 million smartphones in the quarter. Its strategy to focus on the highly fragmented unorganized retail market is paying off, said Mo Jia, Research Analyst. It’s ability to drive sales by investing in marketing campaigns has seen it displace local vendors that once thrived in this space.

The research agency was positive that the implementation of GST regime will help the Indian smartphone market in the future quarters. However, it cautioned that this will also lead to the change in channel strategies, with an emphasis on making distribution models more cost-effective. The new tax regime could adversely impact the pure online players. …those that react quickly to the new regulations will benefit, it noted. ALSO READ: GST: Impact on smartphones and consumer electronics pricing, what could we expect?

One of the key takeaways from the latest Canalys report is the continued absence of the Indian smartphone brands from the list of top vendors. Xiaomi and Lenovo together have dominated the online smartphone segment, whereas the likes of Vivo and OPPO have extensively focused on the offline models. Going forward both Xiaomi and Lenovo are looking to expand into the offline segment, which will further heat the competition with the domestic players.

Canalys previous data had also reflected the same trend in India. Local brands target customers typically buy in cash and from independent retailers. With the short-term liquidity crunch caused by demonetization, these retailers are suffering a slowdown in consumer spending. Local vendors are losing out as retailers look to shift their stock to fast-moving, current devices, Canalys Analyst Rushabh Doshi said.

In Q4 2015, Micromax, Intex and Lava took second, third and fifth place, accounting for almost 30 percent of the market. One year on and all three vendors have dropped out of the top five, with their collective share falling to around 11 percent.

Another important takeaway from the Canalys data is Xiaomi s growth in the Indian market comes at a time when it s bleeding on its home turf. Canalys recent data for the Chinese smartphone market, the company is under an increasing pressure . The agency revealed that the likes of OPPO and Vivo have succeeded in overshadowing Xiaomi with aggressive market campaigns. ALSO READ: Mobile phone prices could increase by 7 percent after GST bill: Coolpad India CEO

Mo Jia, Research Analyst at Canalys commented, To grow this year, Xiaomi will need to quickly switch from being a value-for-money vendor to become an aspirational brand. Xiaomi s desire to move up the value chain in China will be an uphill struggle, considering Oppo and Vivo s lead and Huawei s plans to increase investment in its offline channel in 2017. ALSO READ: Huawei beats OPPO to lead China s smartphone market in Q1 2017; Xiaomi under increasing pressure: Canalys

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  • Published Date: April 28, 2017 4:15 PM IST

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