India’s smartphone market has been one of the most aggressive and active industry in the past year. With newcomers trying their luck almost every few months now, the marketplace has turned into a rather populous battleground for companies. The reason for this being the fact that the demand for smartphones has always been escalating. However, the recent introduction of a new tax system – GST might have slowed things down for the first time ever.
As per a new report by Canalys, smartphone shipments in the country witnessed a year on year decline of four percent in Q2, 2017. A total of 27 million units were shipped last quarter with Samsung still leading the charts through a 25% overall share. Xiaomi’s impeccable performance led to a quadruple growth last quarter bumping them up to the second position. This was followed by Vivo who shipped an all time high of 3.4 million phones. Lastly, Oppo replaced Lenovo (which also includes Moto) as the fourth contender.
Commenting further on the outcomes, Canalys Research Analyst Ishan Dutt, stated, “With China suffering its own decline this quarter, India is a market of huge strategic importance to Chinese smartphone vendors, Samsung is under immense pressure in the mid-tier from the Chinese players. For now, its low-end J Series is helping it sustain its lead and maintain share. But it needs to use its brand to make its mid-tier devices more desirable. The recently launched S8 and S8+ have helped it win back some of its premium shares. It now needs to generate a halo effect around these products in the mid-tier to counteract the threat from China.”
The Good and Services Tax (GST), although, is what caused that tiny plummet. According to the analysts, a severe lack of awareness among retailers and distributors adversely impacted the sales. As a result, stores weren’t being restocked which eventually led to the decline in numbers. “Apprehension among distributors and retailers regarding the impact on prices has caused the market to adopt a wait-and-see policy” added Rushabh Doshi. The report further mentions the increasing demand now will allow the market to recuperate once the confusion has been resolved.