Xiaomi Ousts Samsung, Leads Smartphone Sales in Top 50 Indian Cities: IDC

HIGHLIGHTS

• IDC claims Tier I cities in India are "key volume driver"
• Major 50 cities account for 50 percent of smartphone sales in India
• Bhopal, Gurugram, and Jaipur emerge as "fastest growing cities"

As per a report by International Data Corporation (IDC), Xiaomi held the maximum market share in the top 50 Indian cities in the Q3 2017 period, followed by Samsung, Lenovo (including Moto), Oppo, and Vivo. The top 50 Indian cities have accounted for 50 percent of overall smartphone sales in the country in the third quarter this year. Among all the major cities, Tier I cities in the country are considered to be the "key volume driver" for the Indian smartphone market with a sequential quarterly growth of 29 percent in the last quarter. IDC also reveals that Bhopal, Gurugram, and Jaipur from the Tier II cities have emerged as the "fastest growing cities" with each reporting a massive growth of more than 40 percent from the previous quarter.

IDC in its India Monthly City-Level Smartphone Tracker claims that in the top 50 cities, Xiaomi ousted Samsung to take 26.5 percent of the market. It is said to have registered 120 percent growth in the period, while the Redmi Note 4 contributed to 40 percent of its volumes - becoming the highest selling smartphones across the cities. Offline expansion through the company's Preferred Partner programme and Mi Stores added to this growth, IDC said.

Samsung, which moved to the second slot with 24.1 percent market share, saw 15 percent quarterly growth. IDC says the brand continues to dominate in several cities thanks to its "deep penetration and reach." The Samsung Galaxy J2, Galaxy J7 Max, and Galaxy J7 Nxt made up 50 percent of volumes of the South Korean manufacturer, IDC said.

Lenovo (including the Moto brand) had the third spot with a 10.3 percent share, and grew 8 percent from the previous quarter. New Delhi, Mumbai, and Bengaluru were the top cities for the company, with the Lenovo K6 Power, Moto E4 Plus, and Lenovo K6 Note the top sellers.

Oppo moved up to the fourth position with a 5.2 percent share, with the Oppo F3, F3 Plus, and A71smartphones major contributors to the growth the company enjoyed. Finally, Vivo slipped to the fifth spot at 5.1 percent, and is said to have seen a marginal decline in sales from the last quarter. IDC cites "reduced channel spends" as the primary reason for the fall, but is optimistic about the success of the Vivo V7+ and Vivo Y69 smartphones to bring it back to the fourth position.

IDC says that metro cities continued to be the major contributors to growing smartphone sales in India. Alone Delhi and Mumbai contributed one-fourth of the total sales in top 50 cities. However, expansion of data supply and 4G penetration across the country enabled Tier I and Tier II cities to attract all the smartphone vendors. "Almost all vendors have now decided to go aggressive on offline channel expansion. It will be interesting to see how they are able to match the distribution strength and retail spends by offline dominant players like Samsung, Oppo, and Vivo. Considering the huge hitherto tapped demand from smaller cities and towns, eventually, these vendors will be forced to tweak their strategies to reach out to the customers in these markets," said Navkendar Singh, associate research director, IDC India, in a press statement.

Vendors are reportedly diversifying their sales and marketing strategies, while e-tailers like Amazon and Flipkart are expanding their presence in India to cater the growing demand for smartphones. Furthermore, IDC claims that e-commerce companies are contributing to around 40 percent of the market in top 50 cities in the country.

"Mega-online sale(s) by prominent e-trailers acted as the catalyst for the robust growth across city tiers with e-tailers now contributing around 40 percent of the market in top 50 cities of India. However, the offline channel saw only average traction during the festive season," said Himanshu Jain, market analyst, IDC India.

A previous IDC report revealed that smartphone shipments in India reached a record 39 million units in last quarter, up 40 percent from the previous quarter and 21 percent from the same period last year. Xiaomi surfaced as the top smartphone brand in the country, jointly sharing the leadership with Samsung, with a market share of 23.5 percent in the third quarter.