Per Mint’s analysis, based mostly on knowledge gathered from 4 business analysts, smartphone shipments in India doubtless ranged from 32.5 million to 35 million items within the first quarter of 2024, signalling a modest revival amid muted shopper sentiment.
The Indian smartphone market had peaked within the January-March quarter of 2021 with 38 million items shipped, based on knowledge from Worldwide Knowledge Company (IDC) India. Since then, shipments have declined, dropping 3% year-on-year in Q1 2022 and by an additional 16% in Q1 2023.
After two consecutive years of falling numbers, a 5% progress in smartphone shipments within the first quarter of 2024 could supply much-needed aid for manufacturers and retailers.
The revival is crucial for main gamers like Samsung, Xiaomi, and Vivo, which collectively accounted for about $38 billion in home gadget shipments final yr. This determine has been in decline since 2021 when it reached a document excessive because of the surge in demand prompted by pandemic-induced work-from-home mandates. The continued restoration might be very important for these established manufacturers to keep up their deal with India as a key market.
To make certain, the cargo estimates are based mostly on preliminary market knowledge. Detailed stories from Counterpoint India and IDC India are anticipated within the subsequent three weeks.
Samsung, India’s high smartphone model by market share on the finish of 2023, declined to remark. Xiaomi didn’t reply to Mint’s queries.
“We’re anticipating to see smartphone shipments (for the March quarter) to be anyplace between 33 and 35 million, which indicators a very good, wholesome begin to the yr. This progress is coming even though common promoting costs haven’t decreased prior to now three years,” mentioned Upasana Joshi, analysis supervisor at IDC India.
“Shoppers are doubtless displaying indicators of adapting to the brand new market norms, the place consumers are spending round $250 ( ₹21,000) for a tool, as in opposition to $150 ( ₹13,000) from round three-odd years in the past,” Joshi mentioned.
Though the rise in shipments is modest, it’s a welcome improvement for India’s main smartphone manufacturers. Regardless of earlier declines, manufacturers stay optimistic in regards to the Indian market, pushed by rising common promoting costs (ASPs) which contribute to general worth progress.
As an example, though the cargo quantity in Q1 2024 was just like that of Q1 2020, the typical promoting worth has risen from $199 ( ₹16,000) to $255 ( ₹21,000) at present. Consequently, the primary quarter of 2024 generated about $8.3 billion in market worth, a 28% enhance within the worth of gross smartphone shipments in 4 years, which analysts contemplate important progress amid weak shopper sentiment.
For perspective, even on the peak of market demand, the primary three months of 2021 registered a mean promoting worth of $227 ( ₹18,500)—registering $8.7 billion in market worth.
“These progress metrics present that the India market has remained resilient regardless of a number of components, due to which we count on a 5-6% general progress in smartphone shipments within the first three months of this yr,” added Tarun Pathak, analysis director at Counterpoint India.
Nonetheless, business veterans urge warning, noting that macroeconomic issues proceed to exert strain on shopper sentiment. Strategic product launches have been restricted, and there was a noticeable shift in the direction of the refurbished and second-hand smartphone market, facilitated by the rise of organized retailers on this section.
“The general prevalent macroeconomic circumstances imply that the weak shopper sentiments have remained persistent,” Pathak added.
A senior business analyst at a 3rd agency, who requested anonymity because of model battle, highlighted the absence of the electoral enhance usually seen each 5 years.
“Campaigns and highway exhibits didn’t generate the form of momentary demand that we now have seen in smartphones in earlier elections. Till the final elections are over, we don’t count on to see any government-driven market demand—we one way or the other appear to have missed the bus on this,” the analyst mentioned.
One other analyst from a fourth agency voiced issues in regards to the sustainability of the present market dynamics, notably the boundaries of premium gadget gross sales in a value-driven market like India.
“Manufacturers are up to now conserving joyful for the reason that business worth has remained resilient. This can’t be sustained within the close to future, since you may promote solely so many premium gadgets in the long term—particularly in a value-centric market akin to India,” the analyst mentioned.
“The ASPs won’t carry on rising ceaselessly, and financing schemes are a brief technique to maintain the market ticking,” the analyst added. “Quickly sufficient, this might be trigger for concern, since 5G has not likely contributed to customers upgrading as but—shoppers can not see an enormous distinction between basic providers of 4G and 5G networks.”
Supply: Live Mint