Indian smartphone market up 2% in Q1 2022 as supply bottlenecks loom large: Canalys

Technology


Smartphone vendors shipped 38 million smartphones in India in Q1 2022, as per a new report by Canalys. This represents 2 per cent growth compared to the same quarter last year. While growth is still upwards, single-digit progress is a low number for the country, considering shipments were up in double-digit percentages even during the pandemic.

“While most of the world’s markets battled the third wave of COVID-19 in Q1, the relatively weaker impact on India should have helped it return to growth quickly,” points out Canalys Analyst Sanyam Chaurasia.

The issues this year were with supply bottlenecks. Leading vendors like Xiaomi and Vivo “struggled to secure components for their volume-driving low-end models”.

“In contrast, brands such as realme, Tecno and Itel did remarkably well with solid supply to take on the market leaders and fulfil the low-end demand in Q1,” Chaurasia adds.

Smartphone shipments in Q1 2021 and Q1 2020 (the last two years) were at 11 per cent. While vendors continue to take steps to address supply issues, things have reportedly already started improving from March 2021.

Channel companies are optimistic about healthy sell-in in Q2, with vendors preparing for a strong festive quarter, Chaurasia says.

“They are finding opportunities in the lower-tier cities and towns in India, where device penetration is still relatively low. It is more important than ever for vendors to focus on building a long-term offline channel strategy.”

Growth by brand in Q1 2022

Xiaomi led the charts in Q1 2022 with 8 million shipments and a 21 per cent market share. Although this was down from the 10.5 million shipments and 28 per cent market share in Q1 2021. Note that Xiaomi’s statistics include that of sub-brand Poco.

Samsung came in second with 6.9 million shipments and an 18 per cent market share in Q1 2022. The brand’s numbers in Q1 last year were 7 million shipments and 19 per cent market share.

Realme stood third with 6 million shipments this quarter and 16 per cent market share, being the only brand in the top five chart to have registered positive growth over Q1 2021, growing from 4.3 million shipments and 12 per cent market share.

Vivo and Oppo completed the top five, with 5.7 million and 4.6 million shipments respectively. The brands also stand at 15 per cent and 12 per cent market share respectively. Note that Oppo statistics include that of OnePlus.

Other brands made up the remaining 6.7 million shipments and 18 per cent market share.

Maintaining affordability biggest challenge in 2022; Credit services could play key role

With oil prices soaring and wholesale inflation rates remaining elevated at 14.6 per cent, prices for volume-driving affordable devices will gravitate upwards. Keeping devices affordable during these times will be the biggest challenge this year.

“Volatility in foreign exchange rates and higher operational costs due to inflation will, in turn, put further pressure on vendors to maintain profitability”

One aspect that could play a key role in the months ahead is financing and payment schemes. With numerous buy-now-pay-later partners now in the game, rising phone costs could mean more customers rely on EMI schemes and other credit-based services.

“The mass market will remain India’s growth engine, and having a healthy portfolio in the mid-to-low-end segment will be key to maintaining strong consumer mindshare in 2022. Availability, affordability and attractiveness will be essential for smartphone vendors to succeed as multiple uncertainties lie ahead,” Chaurasia adds.

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