India smartphone market grows 20% in Q2 as Xiaomi retains leadership

Smartphone companies shipped a total of 33.5 million units to India during the second quarter, resulting in healthy 20 percent year-over-year growth, according to data from IDC. The market researcher said growth was supported by a large number of online exclusive launches and strong shipments by offline vendors on the back of promotional activities and channel schemes.

The market is seeing rapid consolidation at the top end, as the top 5 vendors made up 79 percent of sales in Q2, marginalising smaller brands, IDC said.

Xiaomi remains the leader in the smartphone market with growing offline presence while maintaining dominance in the online space. Xiaomi contributed more than 56 percent of shipments in the online space, while 33 percent of its shipments went through offline channels in Q2. In the online segment, Huawei had strong shipments of its Honor branded phones and climbed to second position with an all-time high of 8 percent share in the online segment in Q2.

Other online-focused vendors with exclusive launches were OnePlus with its new OnePlus 6, Realme with the Realme1 and Asus with the Zenfone Max Pro series, all of which led to annual growth of 44 percent in the online channel shipments and took the online share to 36 percent of the smartphone market.

Offline segment growth was driven by Vivo, which had strong shipments during the quarter on the back of marketing campaigns around new launches like the V9, including ads featuring popular movie star Amir Khan, title sponsorship of the Indian Premier League cricket tournament and attractive booster schemes available for channel partners.

The growing popularity of financing schemes in the offline channel by almost all vendors is driving affordability and thus pushing the overall smartphone ASP to a record high of USD 167 in Q2 from USD 157 a year ago. The premium end of the market (USD 500+) grew almost two-fold year-over-year, mainly due to continued strong shipments of the Samsung Galaxy S9 series and OnePlus 6, with OnePlus surpassing Apple to be the second biggest player in the USD 500 segment with a share of 21 percent in Q2.

The feature phone market remained resilient with shipments of 44.0 million units in Q2, seeing growth of 29 percent over Q2 2017. Reliance Jio, the main driver of the 4G feature phone segment with its JioPhone range, remained the top vendor in the overall feature phone market. However, the 4G feature phone market saw a slight decline of 10 percent QoQ with 19.0 million units. This drop is due to JioPhone inventory buildup from Q1, the researchers said.