India's smartphone shipments suffered the highest-ever decline and fell 19 per cent YoY in the first quarter (Q1) of 2023, a new report said on Thursday. According to Counterpoint’s Market Monitor service report, this was the highest-ever Q1 decline witnessed by India smartphone market, besides being the third consecutive quarterly decline.
India witnessed over 31 million unit shipments in the January-March quarter. However, Samsung maintained its top position in the Indian smartphone market for the second consecutive quarter with a 20 per cent share in Q1. It also remained the leading brand for 5G shipments, accounting for a 24 per cent share.
The new 5G-capable A series performed well in offline market, contributing 50 per cent of the shipments. Samsung’s ultra-premium segment (>Rs 45,000, ~$550) grew 247 per cent YoY in Q1, driven by the successful launch of the S23 series and financing options.
“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. Channel players are now focussing on getting rid of existing inventory instead of creating a fresh inventory of new models. It is crucial for OEMs to align their strategies with changed consumer and market dynamics," Shilpi Jain, Senior Research Analyst at Counterpoint Research, said in a statement.
"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 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."
Samsung was followed by Vivo which maintained second position in Q1 with a 17 per cent market share. Although there was a 3 per cent YoY decline, the company’s robust omnichannel presence and cost-effective pricing helped the OEM in maintaining its position.
Xiaomi saw a significant drop from Q1 2022, falling to the third spot during Q1 2023 with a 16 per cent share. It suffered a 44 per cent YoY decline, which is the largest the brand has ever recorded. The decline was due to weak demand in the sub-Rs 10,000 (~$245) segment, more dependence on online channels even when demand is higher in offline channels and a confusing portfolio.
Realme saw a 52 per cent YoY decline in Q1, resulting in the brand slipping to fifth place with a 9 per cent share. Realme continued to face challenges such as inventory build-up and unfavourable market conditions in the sub-Rs 10,000 segment. It is now focusing on offline retail to expand consumer base.