The demand for smartphones in India continued to decline in Q4 2022, following a 6% YoY drop in shipments in the previous quarter. The trend becomes even more concerning given the holiday season when brands offer jaw-dropping discounts on mobile devices. According to Canalys research, smartphone shipments in India declined 27% YoY in Q4 2022, to 32.4 million units.
Global macroeconomic headwinds led to intermittent supply issues and low consumer spending in the country. For the full year, India’s smartphone shipments reached 151.6 million units in 2022, registering a 6% YoY decline.
Notably, it was the first time ever when smartphone shipments declined in the fourth quarter of a year. Just to put things in perspective, smartphone shipments in India grew 2% YoY in Q4 2021.
Now let’s take a closer look at the performance of the top five smartphone brands in India during 2022.
Top 5 Smartphone Brands In India 2022
Samsung reclaimed the top spot in Q4 2022 for the first time since Q3 2017 despite registering a notable decline of 21% YoY in shipments. The Korean giant shipped 6.7 million units during the holiday quarter, accounting for a 21% of India’s total smartphone shipments. However, if we see the entire 2022 picture, Samsung is still ranked second.
Vivo surprisingly jumped from 4th place in Q4 2021 to 2nd place in Q4 2022. The Chinese OEM recorded an impressive 13% YoY growth in its smartphone shipments, totalling 6.4 million units during the fourth quarter of 2022. It’s worth noting that offline channels led to an increase in smartphone sales. However, on an annual basis, Vivo is India’s third-largest smartphone OEM with a 17% market share in 2022.
The biggest surprise comes from Xiaomi which had been sitting at the helm for the past twenty quarters. Xiaomi lost its dominant position in Q4 2022, tumbling down to third place on the list of top 5 smartphone brands in India. The Chinese giant was able to ship about 5.5 million units in Q4 2022, down from a whopping 9.3 million shipped during the same period a year ago. Xiaomi smartphone shipments in India took a nosedive and recorded a massive 40% YoY decline in Q4 2022, all because of ongoing tussles with various government bodies.
However, when the yearly shipment data is considered, Xiaomi still maintains its numero-uno position in India’s smartphone market with a 20% share. The company shipped 29.6 million units during the whole year, registering a 26% YoY decline.
OPPO and realme continued to hold on to fourth and fifth place in Q4 2022, with shipments of 5.4 million and 2.7 million units, respectively. Oppo registered nearly 9% YoY growth, whereas realme witnessed a massive 65% YoY decline in its device shipments during the holiday quarter.
Factors influenced Indian consumers’ buying habits
India is the fastest-growing market in terms of population, smartphone users, e-commerce, OTT viewership, among others. Global companies such as Amazon, Apple, Samsung, Xiaomi, Netflix, etc. are leaving no stone unturned to capture a sizeable share of the Indian market in their respective industries. Surprisingly, the fourth quarter of 2022 saw lower demand for smartphones, as well as a drop in retail spending, and electronic imports.
What factors may have influenced Indian consumers’ purchasing habits during the fourth quarter, also known as the holiday season?
In 2022, consumer spending on smartphones was relatively low in India as a result of rising inflation, unemployment, an impending recession, and uncertain geopolitical scenarios. Many Indians chose to refrain from buying not-so-important products last year. Many found themselves already surrounded by modern technologies they had purchased during the Covid-19 pandemic.
Smartphone vendors who were primarily focused on online channels were adversely affected by a weak holiday shopping season in Q4 2022.
Companies like Xiaomi and Realme suffered the most in Q4 2022 as they used e-commerce platforms like Amazon and Flipkart to clear out inventory of their older models. One of the major reasons behind the unprecedented decline in the smartphone shipments of Xiaomi during Q4 2022 was the tussle between the company and various government bodies, including ED and Income tax department.
The seizure of a huge sum of Rs 5,500 in Xiaomi’s account by ED, Repeated summoning of the top management by ED and IT, and accusations of tax evasion led to blazing marketing guns going silent and stalled the dream ride of the company in India.
On the other hand, during the whole year, Vivo and Oppo focused on offline channels in order to sell their devices in tier-three and tier-four cities. This strategy helped them to register some year-over-year growth in smartphone shipments during Q4 2022. Both Vivo and Oppo recorded 13% YoY and 9% YoY growth in the holiday quarter, respectively.
Interestingly, Samsung maintains a consumer-centric focus across all distribution channels, relying on the retail channel’s strength to drive volume.
“After a rollercoaster 2022, India’s potential is still intact in the long term,” said Sanyam Chaurasia, Analyst at Canalys.
The scenario of Smartphone shipments in India doesn’t look very promising in 2023 either. Analysts at Canalys have predicted moderate growth in the Indian smartphone market for the whole year. A replacement cycle driven by 5G rollout in metros and Tier 1 cities across the country, state government deals and increasing reliance on apps will drive the growth of smartphone shipments in India.
