Chinese smartphone vendors buck India's shrinking market trend in Q2

A pedestrian using a smartphone walks past stores selling mobile phones and accessories at the Nehru Place IT Market in New Delhi, India, May 30, 2017. [Photo/VCG]

India's smartphone market suffered its first downturn in history, as shipments to the country declined by 4 percent year-on-year to less than 27 million units in the second quarter of this year, according to a report by Canalys.

The global technology market analyst firm said while Samsung Electronics continued to be the market bellwether with a 25 percent share in Q2, Chinese smartphone vendors experienced their finest hour to date.

Xiaomi Corp, quadrupling its shipments to 4.8 million units in Q2 in India, took the second place of the market, the report said. In the same period, it got back to the fifth place of the global smartphone market with 23.20 million shipments, covering 6.4 percent of the market share, according to consultancy Strategy Analytics.

Vivo, gaining popularity in India's tier-two and tier-three cities, finished third with a record high 3.4 million shipments in Q2, Canalys's report said. It was followed by Oppo and Lenovo.

More than half of India's smartphone market is secured by Xiaomi, Vivo, Oppo, Lenovo and Gionee collectively.

Indian market is strategically crucial for Chinese smartphone vendors, as their domestic market also suffered decline in Q2, Ishan Dutt, an analyst at Canalys, said in the report.

The report said the decline of Indian market in Q2 was affected by the launch of Goods and Services Tax (GST), a tax applicable from July 1 across all products and services.

Canalys analyst Rushabh Doshi said the market, confused over GST and worrying about its impact on prices, has adopt a wait-and-see policy.

"The market will emerge stronger post-GST. Vendors can look forward to leaner distribution, faster delivery and increased demand from local retailers and distributors," Doshi said in the report.