Market analysts believe that Samsung will overtake Xiaomi to become India’s leading smartphone brand by volume in the coming year, owing to the Korean conglomerate’s growing online sales and financing plans, as well as its Chinese rival’s ongoing regulatory troubles.
Market analysts also estimate that exports in 2023 will be pulled down by macroeconomic challenges that will endure at least through the first half of 2023, resulting in a second consecutive year of contraction, or at most low single-digit growth. Except for the first Covid-hit year of 2020, smartphone shipments in 2022 are projected to dip year on year for the first time.
The expansion of 5G networks will also drive people to purchase more expensive gadgets, pushing average selling costs of smartphones above $250, according to analysts. “Samsung might capture 23-24% market share by the second quarter of 2023, overtaking Xiaomi, who will continue to own 19-20% share of the market,” said Faisal Kawoosa, chief analyst at Techarc.
He added that Samsung’s financing schemes have been accepted well by the retailers, which has helped it to push more premium devices to consumers. “They are also offering a good spread of devices, catering to different segments. Now that markets are not as polarised in terms of opportunity, with both the budget and premium segments offering good business, Samsung has a good chance in beating Xiaomi to the top.”
Experts predict that as the market moves up the price ladder, with average selling prices approaching Rs 20,000, China’s Xiaomi would face consumer resistance. The majority of the company’s revenue has come from the mass volume entry-level market, which is today failing to generate the same volume and revenue as before. This, paired with the company’s heavy scrutiny from government officials, may cause Xiaomi to struggle to increase market share.
“Xiaomi’s acceptability beyond Rs 20,000 is much less. Plus, the issues Xiaomi is going through will play out in the minds of retailers stocking the company’s devices, if not the end users,” Kawoosa said.
According to Counterpoint Research, Samsung is already the industry leader in terms of revenue share.
During the third quarter ended September 2022, the company increased by double digits, outpacing the general market growth in revenues. According to the research organisation, the Korean brand was the only one increasing among the top five over the critical holiday season.
According to IDC India, overall shipments in 2023 are projected to return to levels seen in 2019, totaling around 140 million units, compared to an expected 150 million units in 2022. However, the Rajasthan government has placed a big order of 13 million smartphones for women heads of low-income families.
“We believe the macroeconomic conditions will start easing by the second half of year, which will act as a fillip to sales in the sub-Rs 10,000 segment. People who have held back on purchasing smartphones this year will also go for an upgrade in 2023, which is another factor,” said Prachir Singh, senior analyst, Counterpoint Research.
With the Rajasthan government tender included, Counterpoint Research predicts that the market will expand by 10% year on year. However, it said that the open market will have 4% growth, with macroeconomic conditions projected to ease by the second half of 2023. The market researcher anticipates 163 million unit shipments in 2022.
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