E-commerce and push from China-based manufacturers increases smartphone sales in India

Overall mobile phone market continue to shrink though, says International Data Corporation

Use of online retail and e-commerce websites pushed the growth of smartphone for the second quarter of 2015. About 26.5 million smartphones were shipped to India in the second quarter of 2015— up 44% from 18.4 million units for the same period last year.

This strong second quarter performance saw smartphone shipments grow by 19% following a sluggish first quarter this 2015, said International Data Corporation's (IDC) Quarterly Mobile Phone Tracker. However, this growth was specific to smartphones only as the overall Indian mobile phone market shrunk by 6% this second quarter of 2015 on a year-on-year basis.

Vendors only shipped 59.4 million units in Q2 of 2015 compared to 63.2 million units shipped in the same period a year ago. The growth in the smartphone market was helped by vendors using online retail or eTail to penetrate the market. According to Kiran Kumar, Research Manager with IDC's India Mobile phone team, "eTailers have opened additional avenues for growth for many vendors in India, who would have otherwise struggled to get a hold in the complex distribution network."

Although India remains a retail dominated market, vendors such as Lenovo and Xiaomi have used etailing channels in India to rapidly expand their presence. "The share of smartphone shipments through etailers increased for most of the key vendors in Q2," added Kumar. In addition, Chinese vendors have tripled their shipments on annual basis in India and doubled on quarterly basis.

Lenovo, Xiaomi, Huawei and Gionee alone accounted for 12% of the total smartphone market in the second quarter, double from a year ago. "As China started to slow down, most vendors from the country have targeted India as the next big growth market for smartphones," said Kiranjeet Kaur, Research Manager with IDC's Asia/Pacific Mobile phone team.

The new entrants to the Indian market have utilised specific strategies to drive sales growth, according to Kaur. "Key to the success of the Chinese vendors has been popular flash sales through online players such as Flipkart, Snapdeal and Amazon. At the same time, they also focused on bringing more 4G phones at affordable $100-150 price points which is left unattended by Indian and global vendors," said Kaur.

Except for Lenovo, the top vendors in the second quarter still had majority of their shipments going through traditional channels.Among the vendor ranking, Samsung continues to be the leader in the Indian smartphone market despite QoQ shipment decline, while increasing shipmenst on a YoY basis. The resultant volume growth came from their phones in the affordable segment such as the relatively new Galaxy J1, and older models such as the Galaxy Core. Performance was not boosted by the first full quarter of sales for the new Galaxy S6 and S6 edge. Micromax made a comeback this second quarter of 2015 with 60% QoQ growth.

Even though its AndroidOne phones and the Yu Yureka phones got off to a slow start, its other smartphones in the $50-150 price segment, where it is traditionally strong, performed well. Intex captured the third position.