NEW DELHI: Samsung took the number one spot in the October-December quarter or Q4 of 2022, pipping Chinese handset maker Xiaomi, as per Canalys and Counterpoint research. This happens at a time when the overall shipments for the quarter declined in the Indian market.
Canalys research shows that India’s smartphone shipments fell to 151.6 million units in 2022, declining by 6% compared with 2021. 2022 began with intermittent supply issues and low demand caused by global macroeconomic headwinds. India’s smartphone market suffered its first-ever drop in shipments in the fourth-quarter holiday period, falling by 27% to 32.4 million.
As per separate research by Counterpoint, India’s smartphone shipments saw a decline of 10% on year. Tarun Pathak, research director at Counterpoint said that this is the second decline in the last three years. “While the decline in 2020 was largely Covid-related, the decline in 2022 was purely demand-driven. As per our data, India smartphone market stood at 151 million shipments in 2022, a 10% decline.”
Canalys data suggests that Vivo became the second-largest brand driven by its offline channel, but Counterpoint research shows that Xiaomi was the second largest brand in total shipments in the fourth quarter.
After 20 quarters, Xiaomi lost its leadership position in Q4 2022 and fell to third place with shipments of 5.5 million units. For full-year of 2022, Xiaomi was still the number one vendor. OPPO and realme remained in fourth and fifth place, with shipments of 5.4 million and 2.7 million units respectively, Canalys said.
Samsung shipped 6.7 million units for a market share of 21%, while Vivo captured the second spot with 6.4 million units shipped, Canalys said.
“India was better positioned to weather the global downturn than other markets. But domestic consumer spending cooled in the last few months of 2022,” said Sanyam Chaurasia, Analyst at Canalys.
“Even during the festive season, the domestic market suffered a fall in transactions, retail spending and electronic imports. In 2022, consumers already had up-to-date technology that they had bought during the pandemic, thereby delaying further purchases. This led to smartphone brands struggling with inventory management because demand was subdued. Vendor channel management strategies became more important than ever. The mid-to-high-end segment performed well this year, which will further catalyse the upgrade cycle,” he said.
The analyst said that vendors that were focused predominantly on online channels suffered from a poor ecommerce festive sales performance in Q4 2022.
“Xiaomi aimed to clear out inventory of its older models using the ecommerce channel. But, due to poor ecommerce festive sales performance, Xiaomi and realme saw significant stockpiling of their products in online channels in Q4 2022. At the same time, in tier-three and tier-four cities, vivo and OPPO focused on offline channels, which helped them to be the only vendors to grow year on year. With strength in the retail channel to drive volume, Samsung continues to target consumers across routes to market,” he said.
“After a rollercoaster 2022, India’s potential is still intact in the long term,” said Chaurasia.
Chaurasia said that India’s smartphone market will see a sluggish performance in the short term as the Indian economy started to feel the impact of the global economic slowdown toward the end of 2022.
“But, in 2024, India is set to hold its general election and the government’s strategy will be to boost consumers’ purchasing power, even if inflation remains high. Growth in the mass-market segment remains vital for smartphone vendors and will depend on many uncertain macroeconomic factors. Canalys expects moderate growth in the Indian smartphone market in 2023 fueled by a replacement cycle driven by 5G devices, state government deals, smartphone penetration and the introduction of new use cases.”
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November saw the steepest monthly decline ever – 50% sequentially and 43% on-year – as low demand for the high-volume entry-level smartphone segment continued to take a hit, following up on a slower-than-usual festive season, said Counterpoint Research. It added that Apple is likely to have cracked the top five for the first time ever in November. But for the full fourth quarter, the iPhone maker may still be out of the top five, experts said.
Despite shrinking demand and manufacturing issues in China’s Zhengzhou, Apple reclaimed the top spot in Q4 and achieved its highest quarterly market share ever at 25 per cent, according to market research firm Canalys.
