With 23% Q3 growth, India pips US to become second-largest smartphone market
ET Bureau|
Updated: Oct 27, 2017, 11.14 PM IST
NEW DELHI: India has pipped the US to become the world's second-largest smartphone market at the end of the third quarter, according to two research firms, which also said China’s Xiaomi is expected to end Korean major Samsung’s four and-a-half year reign at the top soon.
Singapore-based Canalys said in a report that the Indian smartphone market grew by 23% year-on-year in the July-September quarter to top 40 million units, fuelled mainly by Xiaomi, which logged an over 290% increase in shipments from a year ago to 9.2 million units. Xiaomi further narrowed its market share gap with leader Samsung, which shipped 9.4 million units in the period, about 30% more than a year ago.
The findings were similar to those of Hong Kong-based Counterpoint Research, which said India shipped a record 84 million units – smartphones and feature phones – during the quarter ended September, and 75% of the units were locally made. At present, more than 100 factories produce phones locally. Counterpoint, however, said India overtaking the US in shipments is a temporary phenomenon.
According to analysts, while shipments were strong in the lead up to the festive season, actual sales were tepid, leading to inventory pile up. They said Xiaomi appears to have done better than most, even in actual sales. “Fourth quarter will be crucial for offline players as they need to streamline their inventory levels, which they have accumulated ahead of Diwali.
We expect discounts and offers to run even post Diwali,” said Tarun Pathak, senior analyst at Counterpoint Research.
Xiaomi India head Manu Kumar Jain, in a late Thursday Facebook post, said the company was the only smartphone maker to sell more than 4 million units across Amazon, Flipkart, Mi.com, and through offline channel partners in the month-long Diwali sales period which started on September 20.
“Xiaomi’s growth is a clear example of how a successful online brand can effectively enter the offline market while maintaining low overheads… We predict Xiaomi’s continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters," Canalys’ analyst Rushabh Doshi said in the report.
Counterpoint's data for same quarter also said Xiaomi had caught up with Samsung, with the Chinese company’s share only 1% behind the latter’s 23%—which amounts to four times growth in market share on-year.
Singapore-based Canalys said in a report that the Indian smartphone market grew by 23% year-on-year in the July-September quarter to top 40 million units, fuelled mainly by Xiaomi, which logged an over 290% increase in shipments from a year ago to 9.2 million units. Xiaomi further narrowed its market share gap with leader Samsung, which shipped 9.4 million units in the period, about 30% more than a year ago.
The findings were similar to those of Hong Kong-based Counterpoint Research, which said India shipped a record 84 million units – smartphones and feature phones – during the quarter ended September, and 75% of the units were locally made. At present, more than 100 factories produce phones locally. Counterpoint, however, said India overtaking the US in shipments is a temporary phenomenon.
According to analysts, while shipments were strong in the lead up to the festive season, actual sales were tepid, leading to inventory pile up. They said Xiaomi appears to have done better than most, even in actual sales. “Fourth quarter will be crucial for offline players as they need to streamline their inventory levels, which they have accumulated ahead of Diwali.
We expect discounts and offers to run even post Diwali,” said Tarun Pathak, senior analyst at Counterpoint Research.
Xiaomi India head Manu Kumar Jain, in a late Thursday Facebook post, said the company was the only smartphone maker to sell more than 4 million units across Amazon, Flipkart, Mi.com, and through offline channel partners in the month-long Diwali sales period which started on September 20.
“Xiaomi’s growth is a clear example of how a successful online brand can effectively enter the offline market while maintaining low overheads… We predict Xiaomi’s continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters," Canalys’ analyst Rushabh Doshi said in the report.
Counterpoint's data for same quarter also said Xiaomi had caught up with Samsung, with the Chinese company’s share only 1% behind the latter’s 23%—which amounts to four times growth in market share on-year.
