A steep annual decline in the month of March (-19 per cent) due to COVID-19 nationwide lockdown restricted the overall growth of the India smartphone shipments to just 4 per cent (year-on-year) in the first quarter this year, with a little over 31 million units, a new report said on Friday. While January and February shipments grew due to new launches and aggressive promotions, March took the sheen off with lockdown coming into force. According to Counterpoint's Market Monitor service, any signs of recovery will likely only start from the third quarter onwards.
"As a result, we are estimating that overall smartphone shipments will decline by 10 per cent for the full calendar year," the report noted.
"The COVID-19 effect on India was relatively mild until mid-March. However, economic activities declined as people save money in expectation of an extended period of uncertainty and an almost complete lockdown," said Prachir Singh, Senior Research Analyst at Counterpoint Research.
Almost all smartphone manufacturing has been suspended since the lockdown started from March 24.
"Further, with the social distancing norms, factories will be running at lower capacities even after the lockdown is lifted. Consumer demand will have a larger impact on smartphone sales, as people will focus on saving and, therefore, limit discretionary purchases," Singh noted.
Shilpi Jain, Research Analyst at Counterpoint Research stressed that smartphones should be considered as essential items during the lockdown as people are dependent on them as a primary mode of communication.
"We believe that sales should be allowed through online channels or at least adopting an Online to Offline (O2O) model. This is happening in Europe and the USA where online channels still remain in service," she said.
For original equipment manufacturers (OEMs), a lot of work will be needed to restart operations once the lockdown is lifted. This will range from managing existing inventory across all distributor and retail touchpoints and supporting retailers sell-through older inventory.
"Also, if the lockdown is lifted in phases starting with the green zone areas, OEMs will have to align their channel and sales strategies to drive sales in these non-affected areas," said Jain.
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