Amazon, Flipkart and other e-retailers might be hogging all the limelight these days with their flash sales, but according to International Data Corporation (IDC) it is the next door mobile phone shops that are most prominent in the smaller cities.
As per IDC’s latest report the demand for smartphones (Offline) in leading 30 cities of India grew 10.2 percent in Q2 compared to Q1 2016. Moreover, the demand in Tier 2 and Tier 3 cities grew 12.9 percent and 8.1 percent respectively.
IDC said that in Tier 2&3 cities, people still rely largely on offline smartphone distributors, which is why growth is more apparent in these cities.
However, consumers in big cities are shifting to e-commerce websites because of price differences between e-stores and offline shops.
According to Upasana Joshi, Senior Market Analyst, IDC India, “We are seeing changes in the distribution strategies by many vendors with many popular online exclusive models being made available offline as well, such as Xiaomi Redmi Note3, Le Eco Le1s, Moto G Turbo Edition, etc. This is indicative of an evolving hybrid distribution structure – online plus offline, which will help these vendors bring their popular smartphone models into smaller towns & cities.”
Chinese smartphone manufactures such as Xiaomi, Oppo etc have dominated in growth of price segment $150-$200 and $200 – $250, with around 28 percent market share in Tier 1 cities in Q2 2016 compared to 19 percent market share in the last quarter. In Tier 2&3 cities it was 24 percent as compared to 17 percent in the previous quarter.]
“Apart from Reliance Jio (Lyf), other Indian vendors were unable to hold on to their market share in Q2 2016. Similar was with global vendors except for Samsung which managed to sustain its market leadership position. This has LED to a sharp increase in the market shares of China based vendors across all Tiers even with their mid segment ASPs (ranging from $150-$200) purely on the back of strong distribution channel, better channel schemes and huge promoter programmes as compared to the rest,” says Varun Singh, market analyst, IDC India.
According to the report from IDC, Samsung is still at the top with 28.5 percent market share in Q2 which is 5.7 percent more from the previous quarter. Micromax came in at 2nd with 11.9 percent share and did extremely well in the sub $100 price segment. However, Lyf flame series is giving a tough fight to the Canvas series from Micromax. Next was Xiaomi with 8.1 percent market share with the increasing sales of smartphones such as Redmi Note 3.
Intex is at the fourth position with 8.0 percent market share but the volume growth was dropped by 4.6 percent. Lenovo (including Motorola) acquired 7.2 percent of market share settling in for fifth position. Oppo took the 7th place with 3.3 percent of market share and Vivo took the 8th position at 2.9 percent of market share.
Apple led the above $300 price segment but in India the smartphone market is majorly below $300 which is why Apple slipped to ninth position with iPhone 5s and 6s being its most selling models.