The Indian smartphone market grew only 1 percent in the April-June period during which the country went into polls, seasonal demand was subdued, and extreme weather conditions prevailed in many regions, with shipments reaching 36.4 million units, market tracker Canalys said in its latest report.
The tracker said that inventory levels remained high, with some vendors launching new devices in higher price segments during the quarter, while others concentrated on reducing existing stocks to optimise inventory ahead of the festival season.
Canalys anticipates mid-single-digit growth in the upcoming festive season and overall shipments this year.
After six quarters, Xiaomi reclaimed the top spot, capturing an 18 percent market share with 6.7 million units shipped. Vivo came a close second with 6.7 million units riding on affordable 5G and mid-range models.
Samsung ranked third with 6.1 million units shipped, while Realme and Oppo rounded out the top five with 4.3 million and 4.2 million units.
“In Q2 2024, top mass-market brands expanded their mid-high-end portfolios and shall use early monsoon sales to clear inventory, making space for new models ahead of the festive season,” said Sanyam Chaurasia, a senior analyst at Canalys.
The analyst said that Handset vendors should prioritise business viability over market share and emphasise strong value propositions for consumers.
“The market is grappling with challenges such as fluctuating demand in the mass-market segment, slow migration from feature phones to smartphones and increasing adoption of second-hand smartphones. As a result, brands often resort to creating unnatural demand through festive promotions. Despite consumers purchasing devices at higher prices, fierce competition across different price ranges makes it hard to sustain profit margins as brands compete for market share," he said.
The market tracker said frequent discounts during festive periods shape consumer expectations for price cuts, diluting brand value and squeezing profit margins.
"Brands must prioritise product innovation, ecosystem development and personalised experiences to ensure consistent year-round shipment upgrades, forging a sustainable business model beyond seasonal demand and deep discounts," Chaurasia said.
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