Online channels are likely to account for a highest-ever 45 per cent share of smartphone sales in 2020 owing to the Covid-19 situation as people would prefer to buy devices online to maintain social distancing, a new report has said. Among the online channels, Flipkart is likely to hold top position while Amazon will grow the fastest.
"Xiaomi is likely to lead the online brand rankings while Realme will be the fastest-growing brand in the online space in 2020," according to the latest report from Counterpoint Research. In Q1 2020, Flipkart led the overall online market with a 50 per cent share but its shipments declined 7 per cent (YoY). However, Amazon grew in Q1 2020 with a 3 per cent (YoY) growth.
"The Covid-19 crisis had little impact in the March-ending quarter. However, during the lockdown, the market has come to an almost complete standstill, massively impacting all aspects of the smartphone market including both online and offline channels," said Prachir Singh, Senior Research Analyst. While all sales volume is set to decline, sales through online channels will only decline by 5 per cent while sales through offline channels are expected to decline by 19 per cent.
"This means the share of sales through online channels will reach around 45 per cent of total volume this year," Singh informed. In Q1 2020, Xiaomi remained the market leader in online channels with 48 per cent share, followed by Realme with 18 per cent share. Realme regained its top position on Flipkart. Among the top 10 online brands, Realme grew the fastest compared to the previous quarter.
However, the brand is also expanding in offline channels. It registered 269 per cent (YoY) growth in the offline channel shipments, said the report. "Online channels remained strong during Q1 2020 due to multiple sales promotions on both Flipkart and Amazon. In terms of the price band, more than 60 per cent of the smartphone shipments on Flipkart were below Rs 10,000 while 80 per cent of the smartphones sold on Amazon were above Rs 10,000," informed Shilpi Jain, Research Analyst.
Smartphone brands are hurriedly evolving their business models and updating channel strategies to cope with the new reality. "We have already seen multiple brands adopting an online to offline (O2O) model and hyperlocal delivery to help their offline channel partners," said Singh. Xiaomi has launched Mi Commerce, Vivo has launched Vivo Smart Retail (VSR) and Samsung has partnered with payments startup Benow to help its offline retailers.