As India’s Covid-19 infections record high every day it turned into bad news for Chinese smartphone makers Xiaomi, Realme, Oppo and Vivo, all of which have been growing in the country in recent years.
From the last year exactly after being hit by lockdowns, India’s smartphone market had been improving until the recent resurgence of the virus. In mid-April, “things took a U-turn” as various parts of the country once again started locking down, according to Kiranjeet Kaur, a senior research manager at IDC.
“People are not venturing outside their home unless they absolutely need to,” Kaur said. “[Online retailers] are only providing essentials, and smartphones are not considered an essential.”
For the past two weeks, daily new infections have surpassed 300,000 in India, with more destructive strains of the virus threatening to increase the crisis. According to an analysis from Bloomberg Intelligence published on Wednesday, the resulting lockdowns have weakened consumer demand, which could push smartphone shipments down 25 per cent in the second quarter.
As per the forecast by market intelligence firm IDC, 9 million fewer handsets shipped in the country than the original 28 million.
India’s recent surge in Covid-19 infections, with daily infections at record highs, has turned into bad news for Chinese smartphone makers Xiaomi, Realme, Oppo and Vivo, all of which have been expanding in the country in recent years.
India has been essential for Chinese smartphone makers looking for growth amid market congestion back home. Their devices have shown popularity for their affordability, and they could bear the brunt of declining sales.
According to IDC, Xiaomi was the country’s top smartphone maker in 2020, shipping 41 million units. According to Bloomberg Intelligence, recessed demand could see the company lose 3 per cent of its expected quarterly revenue.
As per the IDC report, Vivo, Realme and Oppo, all owned by Chinese conglomerate BBK Electronics, were also among the top five smartphone brands last year, after Samsung, Realme has become especially reliant on the market after its handsets became a hit in the country. Shipments in India accounted for more than 45 per cent of the brand’s global total last year.
“Our current business development is affected to a certain extent, but as the situation hopefully improves, we are confident that we will be able to recover quickly,” Realme said in a statement, adding that employee health and safety is of utmost importance to the company.
Oppo said that it provided medical equipment, including breathing machines, to the country, but it did not comment on the virus’ impact on its business in India. Xiaomi and Vivo did not react to requests for comment.
According to Bloomberg Intelligence, all four Chinese smartphone makers have also invested in building up their manufacturing capacity in India to serve rising consumer demand. But now manufacturing in the country could be threatened.
“There might be a temporary cut down in production, but at the same time, these companies are also making sure not to cut down on workforce and may even drive vaccination awareness,” said Tarun Pathak, research director at Counterpoint.
IDC’s Kaur said, smartphone makers in India have learned from previous shutdowns and have taken some basic steps to ensure work continues, adding that factories and logistics are significantly less affected than last year.
There is also a possible silver lining for smartphone companies: lockdowns have increased demand for devices that enable remote learning. But even if smartphone demand recovers soon, a global component shortage continues to plague electronics makers, Kauradded.
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