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NEW DELHI: Smartphone shipments in India fell 13-18% sequentially in the April-June period of 2021 as a result of the second wave of Covid-19, which dampened demand in the market, according to market trackers Canalys and Counterpoint Research.

They, however, said that India will rebound in the second half of 2021, aided by accelerated vaccinations, as well as brands expanding promotional activities and new product releases.

Canalys said that smartphone shipments in India fell 13% between Q1 and Q2 2021 to 32.4 million units. Counterpoint, on the other hand, sees shipments falling between 14-18% in the second quarter.

“Both April and May were better than expected as we have already mentioned that the smartphone market stays resilient and we have seen a strong pent up demand in June. However, there was also a pressure of supply chain shortage that the global market is facing and India is not immune to that as well. However, Q2 might be 14-18% down from Q2 of 2019 levels,” Tarun Pathak, research director at Counterpoint told ET.

A surge in COVID-19 cases prompted regional restrictions and economic disruption, which limited consumers’ disposable income. “India was taken by surprise by its second wave, as the new COVID variant emerged and took hold quickly. For smartphone vendors, this was a wake-up call, and shows the importance of bolstering both online and offline presences equally,” Canalys analyst Sanyam Chaurasia said.

Chaurasia added that smartphone vendors in India had assumed COVID-19 would not return, and several planned to invest in infrastructure for branded stores and partnerships with third-party offline channels. “But once again they were quickly compelled to pivot to an online strategy.”

Chinese smartphone maker Xiaomi remained the market leader, shipping 9.5 million units for a 29% share, followed by Samsung at second position with 5.5 million units shipped for a 17% share, as per Canalys. Vivo came in third with 5.4 million units shipped, while Realme overtook Oppo for the fourth place, shipping 4.9 million units against the latter’s 3.8 million.

Counterpoint’s Pathak said that the market will exhibit a healthy year-on-year growth. Canalys also pointed out signs of a recovery which emerged by the end of Q2 as consumer confidence was boosted by vaccination programs in key localities.

During the second quarter, brands that succeeded in the online channel carried forward the most momentum in Q2, as per Canalys.

“Xiaomi, despite its overall sequential decline, actually grew its online business, primarily thanks to the Redmi Note 10 series,” said Jash Shah, Canalys Research Analyst.

“Realme also saw online momentum, particularly with its Narzo 30 series, as it used price cuts during ‘brand-focused days’ to overtake Oppo. Oppo entered the direct online channel in May, and though it may not be as profitable as third-party retail, it will allow Oppo to conduct more effective product marketing and increase cross-selling opportunities,” Shah added.

Pathak said that 5G smartphone shipments went up from 7% in Q1 2021 to 15% in Q2 2021. The online channel has likely crossed 50% share in the second quarter, he added.

Chaurasia cautioned that the second half will not see a surge in pent-up demand like last year owing to the looming threat of a third wave.

“In the short term, vendors will bear the impact of supply chain disruption, and will be conservative about raising prices. But the component shortage also brings another risk – regional deprioritization – as brands look to allocate their limited supplies of devices to more lucrative markets,” he added.





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