Categories
Tech

Indian Smartphone Market Likely to See 40% Recovery in Second Half of 2020: Report

After going through disruptions in supply chain and curtailed domestic production, the India smartphone market is now showing encouraging signs of revival that sets it on a potential course for market recovery for over 40 per cent in the second half this year, according to a new report. Over the short-term, the mobile market will improve in mid-Q3, spurred by early online sales festivals, setting the smartphone market on a potential path to recovery towards the all-important festive season.

During this period, smartphone brands will focus on showcasing their consumer-centric value propositions, focusing more on hyperlocal delivery models, and launching more 5G-ready smartphones, according to market research firm CMR’s ‘India Mobile Handset Market Review Report.’ CMR’s current estimates point to better performance for the India smartphone market in H2 2020, with the market anticipated to recover by more than 40 per cent in comparison to the first half.

“As a consequence of the pandemic, Q2 2020 was, in essence, a lost quarter. While the mobile handset industry faced multiple challenges with respect to their supply and demand-side dynamics, the industry looks set on the path to a potential recovery in the coming months,” said Amit Sharma, Manager-Industry Intelligence Group, CMR. The initial consumer demand in the unlock phase was driven predominantly through online channels and driven by a need for urgent replacements.

“Facing up to the pandemic, smartphone brands debuted innovative hyperlocal delivery models, some of which have the potential to gain permanence,” Sharma added. The path to potential recovery will be led by pent-up consumer demand, driven by a need for upgrades. In the run-up to the festive season, consumers will seek to go for meaningful value propositions that bring devices and compelling content ecosystem offerings, together.

“This, coupled by smartphone brands bringing more value for money offerings and backed by aggressive messaging, will potentially drive the market,” said Sharma. Thus far, a key challenge for the smartphone market in India to grow has been the inability to offer value propositions that will help feature phone users to migrate to smartphones. “We believe recent announcements, such as the Jio-Google deal, augur well for the future of the mobile handset industry in India, and in potentially enabling the migration of feature phones to smartphone users, with its focus on driving affordability,” said analyst Anand Priya Singh.


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Categories
Tech

Online Sales of Smartphones in India to Clock The Highest Ever Numbers This Year

Online channels are likely to account for a highest-ever 45 per cent share of smartphone sales in 2020 owing to the Covid-19 situation as people would prefer to buy devices online to maintain social distancing, a new report has said. Among the online channels, Flipkart is likely to hold top position while Amazon will grow the fastest.

“Xiaomi is likely to lead the online brand rankings while Realme will be the fastest-growing brand in the online space in 2020,” according to the latest report from Counterpoint Research. In Q1 2020, Flipkart led the overall online market with a 50 per cent share but its shipments declined 7 per cent (YoY). However, Amazon grew in Q1 2020 with a 3 per cent (YoY) growth.

“The Covid-19 crisis had little impact in the March-ending quarter. However, during the lockdown, the market has come to an almost complete standstill, massively impacting all aspects of the smartphone market including both online and offline channels,” said Prachir Singh, Senior Research Analyst. While all sales volume is set to decline, sales through online channels will only decline by 5 per cent while sales through offline channels are expected to decline by 19 per cent.

“This means the share of sales through online channels will reach around 45 per cent of total volume this year,” Singh informed. In Q1 2020, Xiaomi remained the market leader in online channels with 48 per cent share, followed by Realme with 18 per cent share. Realme regained its top position on Flipkart. Among the top 10 online brands, Realme grew the fastest compared to the previous quarter.

However, the brand is also expanding in offline channels. It registered 269 per cent (YoY) growth in the offline channel shipments, said the report. “Online channels remained strong during Q1 2020 due to multiple sales promotions on both Flipkart and Amazon. In terms of the price band, more than 60 per cent of the smartphone shipments on Flipkart were below Rs 10,000 while 80 per cent of the smartphones sold on Amazon were above Rs 10,000,” informed Shilpi Jain, Research Analyst.

Smartphone brands are hurriedly evolving their business models and updating channel strategies to cope with the new reality. “We have already seen multiple brands adopting an online to offline (O2O) model and hyperlocal delivery to help their offline channel partners,” said Singh. Xiaomi has launched Mi Commerce, Vivo has launched Vivo Smart Retail (VSR) and Samsung has partnered with payments startup Benow to help its offline retailers.


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