Top

Coverage: Consumer Research

Online Channel Share Increases to 43% in the Indian Smartphone Market in Q2 2020 As Consumers Preferred Contact-Less Shopping Experience

  • Amazon held its highest ever 47% share among online channels
  • Flipkart led the sub-INR 10,000 segment with more than 50% share in online channels
  • Xiaomi remained the top online smartphone brand with a 44% share
  • Samsung grabbed 25% share in online channels, its highest ever share in a quarter
  • OnePlus was the top premium smartphone brand on Amazon
  • realme remained the top brand on Flipkart

 New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –

August 13, 2020

Online Channels held a 43% share in Q2 2020 in the India online smartphone market, according to the latest research from Counterpoint Research. The increase in online channels share is due to a shift in consumer behavior, who are now preferring contact-less shopping experience and practicing social distancing. The quarter also saw Amazon reaching its highest ever share of 47% among online channels, compared to Flipkart’s 42%. The share of online channels in overall smartphone shipments reached 43% during the quarter as consumers preferred contact-less shopping experiences. Looking forward, we see online channels remaining strong this year and taking a 45% share in the Indian smartphone market in 2020. The COVID-19 pandemic had a huge impact on the current market scenario and innovative business models have emerged.

Commenting on the COVID-19 situation and market dynamics, Senior Research Analyst Prachir Singh said: “The COVID-19 pandemic had a huge impact on the overall smartphone market, April being a washout month. Online channels’ shipments also declined compared to the last year. However, due to the current circumstances, consumers are preferring online platforms. We have already witnessed pre-COVID level shipments at the end of Q2 2020 due to the pent-up demand created in the market by the nationwide lockdown. Brands are aligning their product as well as channel strategies to drive up volumes. Multiple financing options and attractive offers have made the devices more affordable for consumers. During the quarter, multiple brands adopted an online-to-offline (O2O) business model and hyperlocal delivery to help their offline channel partners.”

Commenting on the Q2 2020 findings, Research Analyst Shilpi Jain said: “Online channels remained strong in Q2 2020, grabbing a 43% share in the overall Indian smartphone market. Pent-up demand and changed consumer behavior due to the current circumstances, accompanied by attractive offers and promotions by online platforms, were the main reasons for the increased share. During the quarter, Flipkart organized Big Savings Day Sale to drive up volumes. Due to the preference for online channels, no offline-exclusive model was launched during the quarter. However, during the same period, 11 online-exclusive SKUs were launched.”

Commenting on the brand performance, Jain said: “Xiaomi remained the market leader in online channels with 44% market share. Xiaomi Redmi 8A Dual was the top model for the brand in online channels. Samsung was quite aggressive on online channels and increased its share to 25%, its highest ever share in online channels. Strong shipments of M-series smartphones led to this increase. realme remained the top brand on Flipkart. In Q2 2020, offline channels captured 57% market share. We believe that offline channels will fare better during the latter half of the year. Vivo remained the top brand in offline channels, followed closely by Samsung. Vivo Y91i was the top model for offline channels.”

Exhibit 1: India Online Smartphone Market Share by Channel – Q2 2020

Counterpoint Research - India Online Smartphone Market Q2 2020 By Platforms

Source: Counterpoint Research Market Monitor Q2 2020

Exhibit 2: India Online Smartphone Top Brands Share – Q2 2020

Counterpoint Research - India Online Smartphone Market Q2 2020 By Brands

Source: Counterpoint Research Market Monitor Q2 2020

Market Summary for Q2 2020:

  • While smartphone shipments in the online segment declined by 46% YoY, the offline segment declined by 54% YoY.
  • Amazon became the top online smartphone channel for the first time, with a 47% share. Xiaomi, Samsung, and OnePlus drove the shipments for Amazon.
  • Amazon saw strong shipments of Xiaomi Redmi 8A Dual, Samsung Galaxy M30s, and Galaxy M31. Among the top ten smartphone models on Amazon, nine were from Xiaomi and Samsung.
  • The INR 15,000 – INR 20,000 price band contributed the most and reached its highest ever share on Amazon. Samsung Galaxy M31 and M30s were the top models in this price band on Amazon.
  • OnePlus remained the top premium smartphone brand on Amazon.
  • Flipkart’s share declined; however, the platform led the sub-INR 10,000 price band with more than 50% share in the overall online smartphone market.
  • realme remained the top brand on Flipkart. Among the top ten models on Flipkart, five were from realme. Newly launched Narzo 10 series drove the shipments for the brand.
  • realme, Xiaomi, Samsung, and Poco contributed most for Flipkart and accounted for more than three-fourths of its total smartphone shipments.
  • Poco maintained its strong performance in online channels in Q2 2020 as well. Poco X2 was the second-highest shipped model on Flipkart.
  • The top 5 brands captured more than 88% of the total online market.
  • Xiaomi alone captured more than 44% of the total online market in Q2 2020. Its Redmi 8A Dual, Note 8 series and Redmi 8 drove volumes, contributing to more than three-fourths of Xiaomi’s total online shipments.
  • Samsung increased its share in online channels to 25%, driven by its Galaxy M-series models. Top five online models for the brand were all Galaxy M-series and they contributed to almost 90% shipments for the brand.
  • Vivo hosted sales on both the leading online platforms, offering discounts on its models. The brand maintained its top position on offline channels, driven by Y91i and Y11.
  • Six out of the top ten online models were from Xiaomi, followed by Samsung with three models. Xiaomi Redmi 8A Dual was the best-selling device in Q2 2020.
  • OnePlus drove the shipments in the online premium smartphone segment, capturing more than 50% share, followed by Apple with a 25% share.

The comprehensive and in-depth Q2 2020 Market Monitor is available for subscribing clients. Please contact us at press(at)counterpointresearch.com for further questions regarding our latest research and insights, or press enquiries.

Analyst Contacts:

Prachir Singh

Shilpi Jain

Tarun Pathak

Follow Counterpoint Research
press(at)counterpointresearch.com   

Podcast: COVID-19 To Impact Consumer Smartphone Spending by More Than 30%

It’s been a little over six months since the COVID-19 outbreak started, and a lot of things have changed. To control the spread of the coronavirus, lockdowns have been imposed in several countries like the US, UK, India, and more. The lockdown may have helped in slowing down the virus spread, but it has severely impacted economic activities across the globe. At Counterpoint, we recently conducted our Consumer Lens Study to understand the changing consumer intention and attitudes during the pandemic.

Due to the coronavirus outbreak, a lot of people have lost jobs across different countries. This has affected their future income uncertainty. As a result, consumer buying behavior will strictly be limited to only the essentials. This also means there could be a reduction in their budget. Our Consumer Lens Study aimed to find out if consumers intent to cut their budget for the next smartphone purchase. Also, with social distancing norms in place, we wanted to find out if consumers will be looking for ‘low touch’ sales channels. For companies in the smartphone value chain, our latest podcast episode will help in understanding the consumer demand dynamics and calibrate strategies accordingly in these testing times.

Spending Intention on Purchasing of Smartphone

In the latest episode, “The Counterpoint Podcast” host Peter Richardson discusses the impact of COVID-19 on the consumer spending pattern with senior analyst Pavel Naiya and associate Arushi Chawla. In the podcast episode, Arushi talks about smartphone markets in which we conducted the study and the key findings. Pavel, on the other hand, sheds light on consumer sentiments over buying smartphones from Chinese companies. He also talks about how smartphone makers are coping up with the demand when consumers cannot go to the store and buy smartphones.

Hit the play button to listen to the podcast

Also available for listening/download on:

      

Follow our weekly updates on coronavirus impact:

Consumers Willing to Spend 20% More on 5G Smartphones

Samsung, LG, OnePlus, Oppo, Xiaomi along with many other smartphone players released their first 5G smartphone during 2019. Apple expects to launch next-generation 5G iPhones in 2020. Since the USA is going to be one of the top two markets globally for network roll-out, we conducted a consumer research study to understand potential consumer demand for the new technology.

According to the survey, a majority of consumers showed positive interest in buying a 5G smartphone and almost one in four is willing to spend as much as 20% more to upgrade to a 5G smartphone compared to a 4G model.

The survey revealed some interesting insights on the purchase intention and attitude towards an upcoming wave of 5G smartphones. The interest in buying a 5G smartphone is highest among respondents earning between $1500 – $5000 per month. These consumers are willing to spend between $800-$1500 on a 5G smartphone. Most of these users are using a phone which is at least 18 months old. Respondents earning less than $1500 per month would not want to spend more than $700 on a 5G smartphone. Male respondents reflected a stronger inclination towards 5G smartphones than females.

Further detail on the demographics shows that more than half the respondents in the 25-34 years age group are willing to spend $600 – $1000 on a 5G smartphone, while those over 35 would wish to spend less than $600.

Spending Intention for Buying 5G smartphones

Source: Consumer Lens

The above indicators good are signs for the smartphone and service provider ecosystem. However, with some early users reporting disappointing performance, the industry will need to ensure a positive experience for early adopters to prevent turning-off potential upgraders.

Newer 5G applications and services such as mobile eXtended Reality (XR), cloud gaming and others can accelerate 5G device upgrades. However, we believe the consumer purchase decision will be stimulated further by various factors including operator and brand promotions, data plan pricing, better 5G coverage, and higher data throughput in dense urban areas.

The US and other mature smartphone markets have seen a slowing upgrade cycle in smartphones and the roll-out of 5G networks and devices will likely stimulate a quickening of the replacement rate in the near- to mid-term. According to our preliminary global smartphone shipment estimates, 5G will grow strongly in the USA, China, and several Western European countries over the next year. Compared to initial 4G sales, we expect 5G to grow at a much faster pace and contribute to the global smartphone market growing by four to five percent in 2020.

AR/VR Seen as Killer 5G Consumer App at Huawei Global MBB Forum

Huawei’s 10th Global Mobile Broadband Forum in Zurich, Switzerland was attended by more than 2000 industry executives from leading telcos across the globe. The key theme of the event was “5G, Gear Up” underlying the fact that 5G roll-out is well underway and accelerating.

Product Launches:

Huawei launched a slew of 5G infrastructure products at the event, including:

  • Its latest, third generation SuperBlade macro base station hardware with new Massive MIMO antenna (based on a 7nm chip); Easy Micro, BookRRU and its Digital Indoor System (DIS) Lampsite solutions. To date in 2019, Huawei has shipped 400k Massive MIMO antennas and expects this figure to reach 600k units by end of 2019. The key driver behind this growth is the launch of 5G in late 2019/2020 by the three main Chinese MNOs (the fourth has yet to launch).
  • Huawei announced that chipsets for the NR FDD standard are ready. The first batch of NR FDD smartphones will be launched in 2H 2019. Consumer Premises Equipment (CPE) will be launched in 2020.

Operator Launches:

During the event it was announced that Huawei had won more than 60 commercial contracts worldwide of which 41 are for mobile and 19 Fixed Wireless Access (FWA). Key European operators who have launched 5G using Huawei infrastructure include Sunrise (Switzerland), Telefonica (Spain), Elisa (Finland), KPN (The Netherlands), Vodafone (UK), EE (UK), Three (UK) and O2.

Sunrise:

  • Sunrise’s 5G network now covers 262 towns and cities in Switzerland representing around 80% of the population. The operator intends to launch a 5G Fixed Wireless Access (FWA) service to offer an alternative to ADSL to the remaining 20% of the population. Tests in a 5G cell in Zurich recently achieved a top data download speed of 3.67 Gbps using several brands of smartphones.
  • Sunrise and Huawei announced the development of the first 5G Joint Innovation Centre which will develop and showcase consumer and business 5G applications. Key use cases being developed include smart agriculture, smart factory and smart stadium.
  • Sunrise’s upcoming November 5G service launches include a 4k cloud gaming service with platform partner Gamestream and the first 5G smart ski resort at the LAAX resort on the Crap Sogn Gion mountain (and yes, that is the mountain’s name!).

LG U+:

  • Korean operator LG U+ has achieved around 80% network coverage and will deploy 5G indoors in 2022. However, the company believes that it is 1.5 to 2 times more expensive to use 5G to offer indoor coverage than LTE. The operator has given up on using mmWave to provide universal indoor coverage and instead will focus on providing coverage in selected indoor locations such as large shopping malls, stadiums, etc.
  • LG U+ is using the 28 GHz spectrum band for B2C and B2B applications. Current B2C services offered include AR/VR, Golf, Idol Live and Professional Baseball. LG U+ strongly believes that AR/VR is the killer application for consumer 5G. Its most mature B2B services include: smart school, smart factory and smart drone.

Takeaways and Key Challenges

5G operators are offering a mix of mobile and FWA services according to geography and market opportunities with several experiencing increasing data traffic per person and a steady increase in premium data plan subscriptions, as consumers view 5G data plans as better value for money.

There was broad agreement between operators that the killer app for consumer 5G will be AR/VR and live gaming. However, latency levels will be key to the success of live gaming services. Operators need to monetise latency, data speeds and downloads (downlink & uplink), traffic and connectivity (to tablets, wearables, etc.).

In the enterprise market, most operators are cooperating with service and industrial enterprises to develop vertical 5G applications. The most mature use cases are smart factory, smart ports, smart schools, smart agriculture, smart drones, autonomous control of mining trucks, etc. However, there is a need to develop a complete ecosystem with enterprises, device vendors, etc. before launch. 5G Edge Server Networks will be critical for widespread adoption of many 5G use cases, both consumer and enterprise, and concern was expressed about when this will become a reality.

Key challenges discussed include spectrum availability, particularly the supply of large contiguous (80-100 MHz) spectrum blocks and high CAPEX and OPEX network costs. Spectrum cost was also highlighted as a particular challenge, with calls for more innovative spectrum pricing solutions, such as payment by instalment rather than up-front payments.

5G will require thousands more (supplementary) base station sites compared to 4G and this will require more flexible regulatory procedures by individual countries. There were calls for uniform regulatory standards to be set up on a countrywide (or even continentwide) basis which could be universally adopted by local municipalities.

UK Consumers Cool on Huawei

The US government has been discussing its concerns over Huawei as a potential security threat for many months. It has also been urging other governments to curtail the use of Huawei infrastructure products in telecom networks.

The UK government has criticized Huawei for lax security standards in its infrastructure, but it has stopped short of banning its involvement in the new 5G networks. Further decisions are still pending, but most expect telcos to be allowed to use Huawei kit.

The publicity surrounding these discussions actually had a positive effect on sales of Huawei smartphones – its 1Q 2019 sales jumped 50% globally – likely due to raising general levels of awareness of the company.

Nevertheless, Huawei’s progress was dealt a severe blow by the US administration adding Huawei to its so-called “Entity List”, which prohibits Huawei from buying components, software, and services from US-based firms. The effect was immediate and dramatic.

More recently the US administration has appeared to soften its stance. But the easing is only partial and Huawei remains unable to use components and software freely.  In the light of these swirling developments, we conducted a consumer survey to understand its effect on UK smartphone consumers who were increasingly shifting their purchasing toward Huawei products, before the US ban was imposed.

Full results are available for subscribing clients, but the following is a brief snapshot of some of the results.

According to the survey, most respondents are aware of the action taken against Huawei by the USA – either in detail or more generally – with a wide variety of sources of information being used to understand the ban.

However, more than half the respondents think the action by the US administration against Huawei is either unfair or a borderline case and should not have been imposed. This feeling is highest in the age group of 26-35 years where almost two in every three respondents are in favor of Huawei with males overwhelmingly positive towards Huawei; much more so than females.

Over 40% of those who were interested in Huawei before the ban, are still considering Huawei/Honor for future purchases. Younger people and those on lower incomes form the majority of those still considering Huawei. This is borne out by our anecdotal research with channels which have seen sharp falls in sales of Huawei flagship models, but much less severe falls in sales of Huawei’s and Honor’s lower cost mid-range products.

Consumer Opinion About Huawei Ban

 

Source: Counterpoint Consumer Lens

Should the ban be lifted, many respondents would happily return to buying Huawei smartphones. However, continuing uncertainties about Huawei’s future was cited as the main reason for respondents being unlikely to consider a Huawei smartphone, even if the ban was lifted. This suggests that a return to the previous fast growth trajectory will be hard to achieve quickly.

Chinese brand image also came in the top five key reasons affecting consumer consideration of Huawei. This fact may also tarnish other Chinese brands that are not affected by any trade restrictions.

The main beneficiary though looks to be Samsung, thanks to its strong brand, broad portfolio and excellent distribution that is enabling it to cover the supply gaps left by Huawei.

The detailed analysis is available to all subscribing clients.

Coverage

Insights

Social media

Contact us

Copyright ⓒ Counterpoint Technology Market Research | All rights reserved

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.