Xiaomi, Samsung and others have Flipkart and Amazon to thank for record shipment of smartphones — but it’s not good enough
- The International Data Corporation (IDC) predicts that India’s smartphone industry will only see mid-to-high single digit growth for the year 2019.
- This is despite the third quarter marking a new record for smartphone shipments at 46.6 million.
- One of the reasons is the growth of online platforms as offline sales channels are on the decline.
Despite the record quarter, the International Data Corporation ( IDC) expects India to see mid-to-high single digit growth for the Indian smartphone market for the year.
"This can be attributed to a strong undercurrent of passive consumer sentiment and muted shipments in the last quarter of the year due to a record 3Q19 when channel stock levels went up," stated Navkendar Singh, Research Director with IDC India.
A wave of change in consumer preferences
Normally Xiaomi and Samsung are battling it out over who can garner the greater market share. But, this quarter’s numbers show that while Xiaomi’s shipping volumes have increased 8.5% since last year, Samsung’s have fallen by the same amount.
Even Samsung’s market share has fallen from 22.6% last quarter to 18.9% this quarter. And, Xiaomi’s strengthened its hold with 27.1% market share.
On the other hand, Oppo’s sub-brand — RealMe — continues to increase it market share, overtaking its parent brand. RealMe has 14.3% market share versus Oppo’s 11.8%. According to the IDC, RealMe has grown by 401.3% over the past year.
Festive season and online sales
The record shipments of smartphones were mostly due to online sales, new phones launching and price correction on a few key models, according to the International Data Corporation (IDC).
The high numbers had a key role in turning global sale numbers around. Worldwide smartphone shipments increased by 0.8% in the third quarter of 2019, reversing seven quarters of decline and India led emerging markets in total.
However, the growth of shipments in unequal. Online platforms continue to lead the charge as the offline sales channels face challenges. This quarter, online sales grew at a yearly rate of 28.3% while offline sales fell by 2.6%.
Offline players tried to match e-commerce platforms will attractive deals of their own while dealing with leftover inventory from previous quarters.
"The unabated aggression of the online players will continue to be a challenge for the offline channel, which remains the largest channel for smartphones in India. All these give us an indication of sluggish growth next quarter," said Singh.
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