Surpassing the previous records, India has now overtaken the US and become the world's second-largest smartphone market -- just behind China, according to a report by Canalys. The Indian market is found to have quickly recovered after a wobble in the second quarter of this year.
Canalys analysts on Thursday reported that smartphone shipments in India reached over 40 million units in the third quarter, growing 23 percent year-over-year. Among all the major vendors, Samsung and Xiaomi, which shipped 9.4 million and 9.2 million units respectively, accounted for almost half of the total market, as per the report. As can be seen, Xiaomi is also just behind Samsung, catching up to the long-running leader.
The list of top five vendors, including Samsung, Xiaomi, Vivo, Oppo, and Lenovo, accounts for 75 percent of total shipments in India. Samsung is reported to receive nearly 30 percent growth year-over-year, while Xiaomi increased shipments by 290 percent.
Although Apple didn't manage to reach to compete against the top five vendors in the Indian market, the shipments of its iPhone models grew more than double to over 900,000 units in the third quarter, as per the report.
"There are close to 100 mobile device brands sold in India, with more vendors arriving every quarter," said Canalys Research Analyst Ishan Dutt, in a press statement. "In addition, India has one of the most complex channel landscapes, but with low barriers to entry. Growth will continue. Low smartphone penetration and the explosion of LTE are the main drivers."
Canalys analysts believe that the growing demand for affordable smartphones will help Xiaomi overtake Samsung in the coming quarters. "Xiaomi focuses on the low end. It struggles in the mid-range (devices priced between Rs. 15,000 and Rs. 20,000) where Samsung, Oppo, and Vivo are particularly strong. Nevertheless, we predict Xiaomi's continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters," said Canalys Analyst Rushabh Doshi.
Alongside the growth of young players like Xiaomi, the start of the Goods and Services Tax (GST) in the country is reported to help smartphone distributors and retailers begin inter-state operations. "Reduced indirect taxes have added new equity to the market, with distributors and retailers able to serve beyond their home regions as inter-state operations become easier. As the infrastructure matures, consolidation in distribution is inevitable," Doshi added.
In a recent report, IDC mentioned that the impact of demonetisation last November, and the implementation of the GST, caused weak sell-in shipments in the second quarter. Sellers were reportedly focusing on clearing the existing inventory at the initial stage -- before beginning with the fresh GST-implied stock.