India smartphones market rises on e-tailing in Q2

New Delhi, Aug 11 – Indian smartphones market, riding the etailing wave, has seen a strong rise of 44 percent in the second quarter of 2015, a report said on Tuesday.

Samsung has retained its top spot with 23 percent followed by domestic handset manufacturer Micromax with 17 percent, a new report by the International Data Corporation (IDC) showed.

According to Kiran Kumar, research manager with IDC’s India Mobile Phone team, e-tailers have opened additional avenues for growth for many vendors in India, who would have otherwise struggled to get a hold in the complex distribution network.

Although India remains a retail dominated market, vendors such as Lenovo and Xiaomi have used e-tailing channels in India to rapidly expand their presence. The share of smartphone shipments through e-tailers increased for most of the key vendors in Q2, added Kumar.

Nearly 26.5 million smartphones were shipped to India in the second quarter of 2015 up 44 percent from 18.4 million units for the same period last year.

This strong second quarter performance saw smartphone shipments grow by 19 percent following a sluggish first quarter this 2015, IDC’s Quarterly Mobile Phone Tracker report said.

However, this growth was specific to smartphones only as the overall Indian mobile phone market shrunk by six percent this second quarter of 2015 on a year-on-year (YoY) basis. Vendors only shipped 59.4 million units in the second quarter of 2015 compared to 63.2 million units shipped in the second quarter of 2014, it said.

According to the report, Chinese vendors have tripled their shipments YoY in India and doubled quarter-on-quarter (QoQ). Lenovo, Xiaomi, Huawei and Gionee alone accounted for 12 percent of the total smartphone market in the second quarter, double from a year ago, it showed.

As China started to slow down, most vendors from the country have targeted India as the next big growth market for smartphones, said Kiranjeet Kaur, research manager with IDC’s Asia/Pacific Mobile Phone team.

Key to the success of the Chinese vendors has been popular flash sales through online players such as Flipkart, Snapdeal and Amazon. At the same time, they also focused on bringing more 4G phones at affordable $100-150 price points which is left unattended by Indian and global vendors, he added.

Except for Lenovo, the top vendors in the second quarter still had majority of their shipments going through traditional channels, the report said.

While Samsung remained the leader in the Indian smartphone market despite experiencing a QoQ shipment decline, Micromax made a comeback this second quarter of 2015 with 60 percent QoQ growth.

According to IDC, Samsung’s growth came from the affordable segment backed by strong performance in the first quarter.

Intex captured the number three position launching a slew of new models and Lava continues to feature in the top five of the India smartphone business. Lenovo, as a group, is the only China-based OEM in the top five list in India. It captured six percent of the market.

Currently, IDC expects India to maintain a double-digit growth rate over the next few years as people switch to smartphones and gradually upgrade to 4G smartphones as well.

By 2017, we expect India to overtake USA to be the second largest smartphone market globally, the analytics firm said.