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Journalism of Courage
The Indian smartphone market declined by 6 per cent in 2022 down to 151.6 million shipments, notes a new report by Singapore-based research firm Canalys. More importantly, Xiaomi lost its number one position in the Indian smartphone market for the final and fourth quarter of 2022– which is a first since 2017– as Samsung managed to capture the top spot.
Xiaomi was number one in India for the last 20 quarters and was down to number three in the vendor list, one of its worst performances ever in India. The Chinese smartphone maker faces trouble in India due to slowing growth and tussles with the government, which has accused the brand of money laundering and seized assets.
Canalys’ report showed that domestic consumer spending in India slowed down in the last few months of 2022, which also impacted demand for smartphones negatively.
“In 2022, consumers already had up-to-date technology that they had bought during the pandemic, thereby delaying further purchases. This led to smartphone brands struggling with inventory management because demand was subdued. Vendor channel management strategies became more important than ever. The mid-to-high-end segment performed well this year, which will further catalyze the upgrade cycle,” Sanyam Chaurasia, an Analyst at Canalys, said in a press statement.
He added that vendors who focused predominantly on online channels faced a “poor e-commerce festive sales performance” in the final quarter of the year.
Regarding Xiaomi, Chaurasia said the brand had to “clear out inventory of its older models using the e-commerce channel. But, due to poor e-commerce festive sales performance, Xiaomi and realme saw significant stockpiling of their products in online channels in Q4 2022. At the same time, in tier-three and tier-four cities, vivo and OPPO focused on offline channels, which helped them to be the only vendors to grow year on year.”
Canalys expects moderate growth in the Indian smartphone market in 2023 “fueled by a replacement cycle driven by 5G devices, state government deals, smartphone penetration and the introduction of new use cases,” adds the report.
