Intensifying Smartphone Market
Xiaomi of China is flexing and showing off its muscles in the rapidly growing Indian smartphone market.
According to industry sources on September 27, Xiaomi sold 1 million smartphones in two days during big sales events at Flipkart, India's largest shopping mall and Amazon. The sales volume can translate into selling about 300 units per minute. Xiaomi needed 18 days to sell one million units at the same events last year.
The best-selling model was the Redmi Note 4 of Xiaomi. The Redmi Note launched in the second half of last year belongs to a mid- to low-priced smartphone group and rose to the top of the market standings as the best-selling model with a market share of 7.2% in the second quarter. The Samsung Galaxy J2 ranked third (4.3%), the Oppo A37 took fourth place (3.5%) and the Galaxy J7 came in fifth (3.3%).
According to market researcher Counterpoint Research, Samsung Electronics accounted for 24.1% of the market in the second quarter. Xiaomi which recorded a market share of 6.6% last year recorded 14.2% in the first quarter and 15.5% in the second quarter.
In particular, Xiaomi is under contracts to support offline ads with retailers to cooperate with retail outlets in order to strengthen offline sales. In the process, Samsung and Xiaomi are having a desperate struggle.
Since July, Samsung has stopped supplying products to more than 200 retail outlets dealing in Xiaomi's smartphones. At the same time, Samsung is supporting stores friendly with Samsung with marketing fees as part of its 'carrot and stick' strategy. However, competition is expected to intensify as Xiaomi aims to secure more than 1,000 retail partners.
The smartphone penetration rate in the Indian market which grew 18% last year is only 39% as of the end of last year. With a population of 1.3 billion, India is an attractive market in terms of size even compared to China. Furthermore, the Indian market has great growth potential now that people in India are still switching from feature phones to smartphones.
In particular, smartphone shipments hit less than 200 million units in India last year. The figure is not high compared to China which has a similar population size and shipped more than 500 million smartphones. This year, smartphone sales are expected to reach 170 million units in India.