The effects of demonetisation were felt in almost every sector of the market but the smartphone ecosystem was one of the worst hit. However, it now seems to have recovered from this huge impact, showing a 4.7% growth in sales to 27 million units in January to March 2017. This is a substantial growth from what was seen in the previous quarter.
According to a report by research firm International Data Corporation (IDC),
The first quarter of 2017 saw smartphone shipments growing at healthy 14.8% over the year-ago period.
In November 2016, the Modi government scrapped all currency notes, i.e 500 and 100 rupee notes, of high denominations. This resulted in over 20 percent fall in shipments in that quarter as compared to the previous quarter of the same year. The main effect of demonetisation was increase in options for digital payments. Over time, cash transactions have once again returned to becoming functional in the Indian market. This resulted in the smartphones market quickly picking itself up again, according to experts within the industry.
According to the IDC, China-based vendors are still the biggest shareholder of smartphone shipments in India, with a 51.4% market share currently. This share seems to be continuously increasing with the stronghold of the vendors remaining intact in the smartphone market.
With regards to the same, IDC stated,
The China-based vendors were already bringing majority of devices in 4G segment, which benefited them in leveraging the 4G wave demand in India.
The share of homegrown market saw a substantial drop from 40.5% in the first quarter of 2016 to 13.5% in the first quarter of 2017.
In spite of this, Samsung is currently dominating the market with a market share of 28.1%, followed by Xiaomi with 14.2%, and Vivo, Lenovo, and Oppo with 10.5%, 9.6%, and 9.3% in market shares respectively.
The IDC India Market Analyst (Client Devices) Jaipal Singh made a statement saying,
Homegrown vendors are making attempts to recapture the lost ground with new launches in sub-$100 as well as in the mid-range segment. But intense competition from China-based vendors continues to be a major challenge and is expected to increase in coming quarters. Recovery of the homegrown vendor is necessary for the Indian smartphone market, not only to fill in the vacuum created over the last few quarters, but also to fuel the feature phone to smartphone migration.
An interesting point to note is that the average selling price of smartphones has increased to $155 as compared to $131 from the first quarter of 2016. Almost two-thirds of the smartphones of China-based vendors fall into the price range of $100-$200 in the country.