Across the country, the anti-China sentiment is sweeping, impacting the fortunes of Chinese smartphone brands, that have otherwise always enjoyed a vice like grip in the Indian industry. In the second quarter of this year, the total share of Chinese brands fell from 81% to 72%, i.e. by almost 10%. Out of the five top companies, four have origins in China, including the market leader Xiaomi, and the others being Vivo, Oppo, and Realme.

This fall has mainly been attributed to the mixture of a stuttering supply from major Chinese brands like Vivo, Oppo and Realme, and the growing anti-China sentiment, both compounded with the strict actions taken by the Government in banning 59 China-linked apps, the delay of import of goods from China, amid extra scrutiny and security. All of this resulted from the India-China border dispute that took place majorly in June.

From this chain of events, the biggest benefactor was the South Korean electronics major Samsung, which saw its sales return to 94% of pre-lockdown levels by the end of the quarter. What helped it achieve these levels are the relatively diversified supply chain set up and the lower dependence on parts from China. Moreover, Samsung was seen to be less disrupted in terms of supplies, and was the first company to resume full manufacturing by the end of June, 2020.

This strong rebound helped Samsung regain the number 2 position in the market, that it had lost to Vivo in the last two quarters, and helped it edge closer to Xiaomi. Samsung had a market share of 26% in Q2, that was its highest in 2 years, as compared to just 16% in Q1. During the lockdown, there was a spur in online sale of mobiles, which contributed to almost 45% of total sales.

Almost 40 days of production were lost because of the pandemic and the resultant lockdowns. The sales of smartphones were also hit due to the same. In May, the government allowed shops to open and online channel deliveries for non-essential items. As a result, there was a huge surge in sales, and it increased as the lockdown restrictions were gradually lifted. Thus, the quarter was strongly affected by both demand and supply constraints. This led OEMs to reconsider and make changes to their traditional market strategies. On the supply side, most factories were shut down in April and only started operating in May. This resulted in supply shortages for some manufacturers. Other brands maintained the supply of their products by importing fully assembled handsets.

Further, the anti-China sentiment has even opened up new windows of opportunity for homegrown brands like Lava and Micromax to make a comeback into the market, but it is still not clear if it will happen, or even if it does, how long they will be able to sustain in the market.

Moreover, the recent Google-Jio partnership to bring highly affordable 4G Android smartphones could also gain ground, banking on the growing 'Vocal for Local' sentiment.