What makes Xiaomi beat Samsung again, JioPhone the king of feature phones

Chinese smartphone manufacturer Xiaomi has become the top smartphone brand in India, beating Samsung during the January-March quarter of 2018, for a second time. With a market share of 31.1 per cent based on total shipments, Xiaomi shipped more smartphones than Samsung in the January-March quarter of 2018, according to a Counterpoint research report. In the feature phone segment, Mukesh Ambani-owned Reliance Jio’s 4G VoLTE-enabled phone continued to lead the market with a share of 35.8 per cent, based on total number of units shipped in the first quarter of the 2018 calendar year.
 

In the smartphone segment, Xiaomi maintained its lead, while Samsung was second with a 26 per cent share. Following them were vivo (6%), OPPO (6%), and Honor (3%). Huawei’s Honor brand, for the first time, captured the fifth position in the Indian smartphone market, thanks to the strong performance of Honor 9 Lite and Honor 7X across online channels.

 

According to the report, the performance of Chinese brands remained strong. They accounted for 57 per cent of the total smartphone market during the January-March quarter of 2018, up from 53 per cent during the same quarter a year earlier. This is Chinese players’ highest-ever contribution in the Indian smartphone market.

Understanding Xiaomi’s growth

In the second half of 2017, Xiaomi disrupted the smartphone segment with an aggressively priced portfolio taken to market with an effective channel expansion strategy. Devices such as the Redmi 5A, priced as low as Rs 4,999 for first 5 million units, set the tone for the manufacturer to expand its user base by reaching out to first-time smartphone users.

This year, the Chinese smartphone maker launched the Redmi Note 5 and Note 5 Pro on February 14, becoming the first smartphone brand to roll out budget-centric devices. In quick succession, the company also launched the entry-level Redmi 5 on March 14 in the company’s budget portfolio for the January-March quarter.

These early launches, coupled with aggressive pricing and value-for-money propositions gave the company an edge, especially in the absence of any new model from competitors. The company’s foray into the television segment cemented the brand’s value even further, helping the company, primarily known for smartphones, grow exponentially in the first quarter.

What set Samsung back?

While Samsung started the year with the launch of premium flagship devices – the Galaxy S9-series – the company’s entry-level Galaxy J-series suffered due to Chinese players' dominance in the value-for-money smartphone segment. Not just Xiaomi, but other Chinese brands such as Tecno, Itel and Infinix also gained popularity in the budget segment of the Indian mobile phone industry.

According to the report by Counterpoint, the China based Transsion Group (the holding group of Tecno, Itel and Infinix) has become the fifth largest player with 4 per cent market share in Q1 2018 (combined for all three brands).

Tecno, which made a debut in April last year, has emerged as a leading smartphone brand and is close to entering the top ten list. The brand grew 23 per cent quarter-over-quarter in Q1 2018.

How Huawei Honor made it to the top five

Huawei’s backed Honor showed a growth of 146 per cent, therefore, becoming the fastest growing smartphone brand followed by Xiaomi (134%) and OnePlus (112%) in Q1 2018.

Of late, Huawei’s Honor has been very active in India. The Chinese smartphone manufacturer launched smartphones such as honor 9i, Honor 7x and Honor 9 Lite across segments in a quick succession. The company also started manufacturing the Honor 7x in India in partnership with Flex, a Sketch-to-Scale solutions provider, at Flex's plant in Sriperumbudur near Chennai.

A robust feature-rich portfolio of smartphones, extensive presence in offline and online market and quick launch cycles could have been the reasons that made the Chinese firm feature in the top five smartphones list.

What about feature phones?

 
In feature phones segment, on the other hand, Mukesh Ambani-owned Reliance Jio’s 4G VoLTE-enabled phone continued to lead the market with a market share of 35.8 per cent based on total number of units shipped in Q1 of 2018.

Reasons for JioPhone's success

Launched last year at the Reliance annual general meeting, the JioPhone garnered phenomenal response from Indian consumers, especially due to its effectively free price tag. The unprecedented response even forced the company to temporarily put on hold the phone’s registration process.

JioPhone, for its feature phone tag with 4G VoLTE-enabled connectivity and compatibility with Jio app suite, enabled the 2G feature phone users move to internet-ready device. Now, the JioPhone has became the top feature phone brand for the second consecutive time.

What about the overall Indian mobile phone market?

In its earlier report, Counterpoint highlighted that the smartphone sales slowed considerably in 2017 to 14 per cent. According to the new report, the Indian mobile phone market grew by 48 per cent year-over-year in Q1 2018, driven by a strong demand from the feature phone segment. However, the smartphone market remained flat.

How has Xiaomi fared against Samsung in the past?

In January this year, the Counterpoint research report first reported that Xiaomi overtook Samsung to become the top player in the Indian smartphone market in the December quarter, ending the Korean company's 6-year dominance. According to the report, Xiaomi market share grew to 25 per cent in the fourth quarter of 2017, up from 9 per cent in the year-ago period.

Samsung, on the other hand, saw its market share falling to 23 per cent in the latest October-December quarter, from 24 per cent a year ago. For the entire 2017, Samsung managed to hold on to the top position with 24 per cent share, followed by Xiaomi with 19 per cent share, Counterpoint data stated. During the second half, however, Xiaomi disrupted the market with aggressively-priced broad portfolio taken to market with an effective channel expansion strategy, Counterpoint Research Associate Director Tarun Pathak said.

However, Samsung refuted the Canalys and Counterpoint report and claimed to have the leadership position in the Indian smartphone market. The South Korea-based electronics giant cited a report released by Germany-based research firm Gfk to back its claim.

According to Samsung, which cited the Gfk report, the South Korean company in the last (November) quarter had a 45 per cent share in market value and 40 per cent market share in terms of volume, according to a statement issued by Samsung India spokesperson. It is important to note that the Gfk report takes into consideration the actual sales number instead of total shipment.