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Smartphone shipments in India fell 19% in Jan-March 2023, Samsung kept top spot: Counterpoint Research

Report by Counterpoint Research attributes decline in smartphone shipments to sluggish demand, high inventory buildup & growing consumer preference for refurbished phones.

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New Delhi: Smartphone shipments in India declined by 19 per cent to about 31 million units in the January-March 2023 period compared to the same quarter last year, according to the latest report by Hong Kong-headquartered global industry analysis firm Counterpoint Research, which attributed this downturn to multiple factors including sluggish demand, high inventory buildup and growing consumer preference for refurbished phones.

Besides being the third consecutive quarterly decline in smartphone shipments in India, this decline of 19 per cent is the highest-ever Q1 decline witnessed by the Indian smartphone market.

“Sluggish demand, high inventory buildup carried over from 2022, growing consumer preference for refurbished phones and pessimistic channel view of the market contributed to this decline,” the research agency said in a statement issued Thursday.

According to the report, Samsung continued to be the leader in the Indian smartphone market for the second consecutive quarter with a 20 per cent share in Q1 2023, with Vivo in the second spot (17 per cent market share), followed by Xiaomi (16 per cent market share), Oppo (12 per cent market share), and realme (9 per cent market share).

In a separate note, Counterpoint Research added that the demand for refurbished smartphones grew 5 per cent globally in 2022, led by a growth of 19 per cent in India.

“We are observing a change in consumer behaviour — demand is now concentrated around promotional periods. The beginning of the quarter saw a surge in demand across channels around the Republic Day sales period. However, demand dropped significantly after the sales period,” wrote Shilpi Jain, a senior research analyst at Counterpoint Research.

Jain added that channel players (distributors) are now focussing on getting rid of existing inventory, instead of creating a fresh inventory of new models, and that it is crucial for OEMs (original equipment manufacturer) to align their strategies with changed consumer and market dynamics.

“The quarter’s silver lining came from 5G smartphones, whose contribution (43 per cent) crossed 40 per cent for the first time, registering 23 per cent YoY (year-on-year) growth as consumers kept upgrading to 5G devices. We believe these situations will remain similar in Q2 2023 as well with growth coming back in the second half of the year owing to faster 5G upgrades, easing macroeconomic pressure and festive season,” she wrote.

“Premiumization trend is becoming stronger with each passing quarter,” wrote Prachir Singh, also a senior research analyst at Counterpoint, while talking about the price band analysis — division of a product’s price range into different categories or ‘bands’ depending on the price of the product.

He added, “The premium segment’s share almost doubled in Q1 2023 compared to Q1 2022…The premium segment’s growth is reducing the mid-tier share as consumers are upgrading to higher-priced smartphones.”

Singh further pointed out that the “sub-INR 10,000 price band continued to decline in Q1 2023, with its shipments falling 9 per cent YoY”. 

“This segment is suffering declining demand due to an elongated replacement period, declining feature phone-to-smartphone migration and lower presence of hero models,” he added.

(Edited by Amrtansh Arora)


Also Read: Uptick in smartphone sales unlikely this year; 5G segment a silver lining, say market watchers


 

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