Indian Smartphone Market Grows Just 2 pc Year-on-year On Supply Chain Woes

The Indian smartphone industry, like others around the world, has been facing a severe supply crunch where supply chains remained the biggest challenge
Indian Smartphone Market Grows Just 2 pc Year-on-year On Supply Chain Woes

Supply chains remained the biggest challenge for leading vendors such as Xiaomi and Vivo as they struggled to secure components for their volume-driving low-end models.

India’s smartphone market grew only 2 percent in the first quarter of 2022 from the same period last year. According to experts, this is an alarming sign since the Indian smartphone market had experienced double-digit growth even during the pandemic times. 

The Indian smartphone industry, like others around the world, has been facing a severe supply crunch. Supply chains remained the biggest challenge for leading vendors such as Xiaomi and Vivo, which struggled to secure components for their volume-driving low-end models in Q1, according to a report by independent analysis agency Canalys.

“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 [the smartphone market] return to growth quickly,” Sanyam Chaurasia, Analyst, Canalys. 

However, the slump did not affect brands such as Realme, Tecno, and Itel, which did relatively well with a decent supply, taking on the market leaders in fulfilling low-end demand in Q1.

The worst-affected brand was Xiaomi, which clocked negative annual growth of 24 percent while having the largest market share (21 percent) as of Q1 2022. It was followed by Vivo and Oppo, which saw dips of 15 percent and 13 percent, respectively. Xiaomi’s numbers include its sub-brand Poco and Oppo includes OnePlus. Realme was the clear outlier, with 40 percent annual growth.

This meant that while most brands – Xiaomi, Samsung, Vivo, and Oppo saw their market share fall from the same period last year, Realme’s market share rose from 12 percent in Q1 2021 to 16 percent in Q1 2022.

“The biggest challenge vendors will face in 2022 will be maintaining device affordability,” said Chaurasia, since oil prices in India are at an all-time high and wholesale inflation is at 14.6 percent as of March 2022. Volatility in foreign exchange rates and higher operational costs due to inflation will make it even harder for vendors to stay profitable, he said.

Additionally, as buy-now-pay-later companies mushroom, enticing customers with payment schemes won’t get any easier. Therefore, Chaurasia said, availability, affordability, and attractiveness will be essential for smartphone vendors to succeed as many uncertainties lie ahead.

READ MORE: Smartphone Shipment Dips 2 pc to 52 Million Units In September Quarter

Publish Date
Not Sponsored
Live: People Reading Now
RECOMMENDED FOR YOU
TRENDING ARTICLE