Sudden Change Of The Weather: The Mobile Phone Market In India Under The Outbreak Of The Epidemic

Li Li has been stationed in India all year round since 2016, but now he has not been there for more than a year due to the new crown pneumonia epidemic.

Li Li used to be a distributor of electronic products, but since last year, he has adjusted his strategy and launched many platforms for daily consumer goods and distribution. Just this week, he launched a series of new platform plans, and greatly adjusted the product structure.

He told the 21st century economic report that the proportion of electronic products sold in the company was 100%, but this year, he plans to clear the inventory of electronic products as the main strategy, accounting for only 20%, and the rest is sales of daily necessities“ In fact, the volume of mobile phone sales did not drop sharply, but we made these sales adjustments ourselves. " Li added.

Even though the market has not fallen sharply, the statistics of several third-party institutions show that in 2020, India, the world's second-largest smartphone market, will show a decline in annual shipment for the first time. A number of institutions told reporters that it is estimated that in the second quarter of this year, Indian market shipment will still have a downward trend.

Looking back, in fact, 2020 will not be so difficult for the mobile phone industry chain. The core of the decline in shipment is mainly due to the shortage of goods rather than the change of consumption power. Some people in the industry chain confirmed to reporters that last year, in fact, it was "lying and earning" in India. However, under the uncertainty of this year, some small and medium-sized industrial chain manufacturers have decided to leave the market. Of course, large factories are still actively promoting business deployment.

However, in this year, from a swarm of active planning and construction to partial withdrawal, India's smart machine market has completely changed.

Epidemic spreading into industrial chain

New pneumonia cases are spreading rapidly in India, including many mobile phone industry chain factories stationed there, which will more or less affect the normal operation of the factories.

Foxconn's parent company, Hon Hai, has attracted the most attention. Recently, it was reported that ten Chinese engineers of Hon Hai in an Indian OEM factory for apple were diagnosed with new crown pneumonia. Subsequently, Hon Hai Technology Group issued a statement confirming the diagnosis of Chinese employees. The company said that it had arranged treatment and completed environmental disinfection, and the plant is still in operation.

The impact of the case spread on the mobile phone industry chain is diverse: at the production level, if there is no large-scale outbreak in the factory, it will only affect the production progress for a few days; At the supply chain level, due to customs policies and other measures, India's mobile phone industry chain is still in the condition of shortage of some components; In terms of logistics, the blockade between cities or states will inevitably affect consumption time and transportation capacity. More important may be the impact of macroeconomic fluctuations on the consumption capacity of Indian people.

Prachir Singh, a senior analyst at counterpoint, told 21st century business reporter, "with the increase of new crown pneumonia cases, we saw that the demand and shipment of intelligent machines in India in April were declining. We estimate that total shipments in the second quarter of 2021 are likely to fall by more than 25% compared to our previous estimates. "

However, he also pointed out that last year's performance showed that India's smartphone market is very flexible, so it is expected that the Indian market will recover during the following festivals“ Overall, we believe that the market will be able to ship 168-173 million units. "

Sanyam chaurasia, an analyst with canalys, told 21st century economic news that "from now on to a month later, local authorities can allow shops to open for 3-4 hours a day, even for non essential goods and online delivery, they can operate normally under better preventive conditions. In this case, sales of smart phones are still likely to occur, and consumers can still buy them based on considerations such as online education. "

He added that as Maharashtra and Delhi are the largest markets in India, it is estimated that the impact on the overall market will be about 15% - 20% based on the interference caused by the current blockade and other measures.

Sanyam told reporters that the price rise of terminals has begun due to the shortage of supply, depreciation of rupee and long-distance demand“ Xiaomi, the lowest margin smartphone manufacturer in India, has raised the price of the redmi note 10 based 4 + 64 GB Model from 11999 rupees to 12499 rupees. This is one of the driving forces for millet sales below $200. "

He further pointed out that the shortage of mobile phone chips is not as serious as that of automotive electronics, but power management chips and display driver chips are undoubtedly still in short supply, which will affect the overall terminal production progress.

"But this year is very different from last year. Last year, India adopted a two-month total blockade, in which economic activities and production and living standards were basically stagnant, but this year it did not take such a thorough measure. So we don't think the second quarter of this year will be as steep as it was in the same period last year. " Sanyam believes that if India had shipped 35-40 million smartphones in the second quarter, it is now expected to reduce to 30 million.

According to Tianfeng international analyst Guo Mingji in a recent research report, his latest investigation shows that India's new crown outbreak has a negative impact on Android phone demand in the short term. At present, Samsung, oppo, vivo and Xiaomi have all lowered their Indian market orders by about 10% - 20% in the second quarter of 2021.

Large factories group together and small factories withdraw

"Uncertainty" has become the common understanding of people in the industrial chain when talking about the Indian market.

"Because the original mobile phone channels are concentrated in offline stores, but the offline stores need too many people and contact is too strong, so I reduced the relevant investment." Li Li told reporters that in March last year, he had laid off a large number of offline channels, leaving only the current online channel team, and there is no further staff change at present.

"In terms of unit price per customer, since I intentionally adjusted the sales of electronic products last year, the unit price has been declining. However, I began to focus on the sales of daily necessities, so the unit price of this part of the customer has increased, because it is a shortage of supplies, so there is no need to lower the price." Li Liru explains.

There are also policy factors behind this. It has been reported that India has suspended the approval for the import of WiFi modules from China for several months, which has led to the postponement of product release in the Indian market by American computer manufacturers Dell and HP, as well as Chinese companies such as Xiaomi, oppo, vivo and Lenovo.

Li Li confirmed this to reporters“ We have received information from India that it will have an impact on the logistics and customs clearance of electronic products, and if the epidemic situation in India spreads, it may ban the transportation of electronic products as last year, and only allow the transportation of daily necessities, so I choose to switch categories temporarily. "

Sanyam, an analyst at canalys, also told reporters that unlike last year, any import into India would be very challenging, as the certification approval process took about three months and a 22% tariff would be charged.

As a mobile phone industry chain manufacturer, it may need to be more "decisive". Zhang Xin is one of those who chose to withdraw from the Indian market temporarily.

"Last year, due to the shortage of goods, many manufacturers chased me for equipment. I had expected that my business would double with such high demand, but in the end, about 40% of sales increased last year, far less than expected." He told 21st century business reporter.

Fortunately, the impact of local ethnic sentiment has been gradually eliminated. In the long run, Chinese mobile phone brands are still very competitive in the Indian market.

Prachir told reporters that according to counterpoint's latest forecast, by the first quarter of 2021, Chinese brands accounted for more than 75% of India's overall market shipment volume, and I believe this trend will continue“ Value for money products, competitive pricing and aggressive channel strategy have been the main reasons why Chinese brands dominate the Indian smartphone market. "

"Last year, we can basically say that we are" lying on the back to earn money "because of the continuous shortage of goods An insider of a mobile phone manufacturer in charge of India's business told 21st century economic news, but this year, they will be very worried about the impact of the epidemic on the consumption ability of local people.

"As far as I know, there is a large amount of evacuation from India at present." Li Li told the 21st century economic reporter that, however, this may also be related to the size of the company, because there are a large number of small and medium-sized companies deployed in India, so their withdrawal appears to be large. However, large factories such as oppo, Xiaomi and Foxconn will certainly continue to carry on.

"Because private small and medium-sized industrial chain manufacturers will suffer a lot and lose a lot in this period of time. In fact, it is not only the epidemic situation, but also the uncertainty of policy and tariff He believes that even if small and medium-sized manufacturers leave, the big factories in India should be able to take over these businesses and keep them going.

In recent years, with the global deployment of mainstream mobile phone manufacturers, Zhang Xin's eyes have already turned to other overseas markets, such as Vietnam, Japan and European countries.

"I originally planned to go to Vietnam to build a new equipment plant in May this year, but because of other expansion matters at hand, it has not been deployed, but it is already in the plan." Zhang Xin pointed out to reporters that in March this year, his team had opened up new market movements in Japan.

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