India's smartphone market hits record 53 million units in Q3, Samsung reclaims top spot

Smartphone segment in India rebounded after the lockdown to touch an all-time high of 53 million units in the September quarter, with Samsung toppling Xiaomi from the number one spot, according to research firm Counterpoint.

India's smartphone shipments grew 9 per cent year-on-year to reach over 53 million units in July September 2020 quarter - the highest-ever shipment in a quarter for the Indian smartphone market, Counterpoint said.

"The push from the brands coupled with the pent-up demand due to the lockdown and strong sales on online platforms led to this growth. Consumers are still preferring online platforms due to COVID-19 fears," it added.

Samsung led the smartphone market with a 24 per cent share, followed by Xiaomi (23 per cent), Vivo (16 per cent), Realme (15 per cent) and Oppo (10 per cent).

Counterpoint said Samsung became a leading brand in the Indian smartphone market after two years with 32 per cent year-on-year growth, and the strong performance was the result of multiple strategies, including effective supply chain and touching various price points through new launches.

Samsung's aggressive push in online channels, with the highest ever online contribution within its portfolio, also helped it regain its number one spot, it added.

Counterpoint Research Analyst Shilpi Jain said even the offline-centric brands like Vivo, Oppo and Itel are increasing their online presence due to the changing consumer behaviour.

"Though online channels remain in focus, OEMs are also trying to leverage new opportunities in offline channels in tier II and III cities... Additionally, the brands are focussing on affordability by announcing cashback, promotions and offers on devices," she added.

Jain said on the manufacturing front, the Indian government is focusing on increasing the local value addition.

"Mobile handset production is likely to increase in the coming time as schemes like Production Linked Incentive (PLI) start to impact the overall electronic manufacturing ecosystem. Indian brands like Micromax and Lava are expected to leverage the government's 'Aatmanirbhar Bharat' initiative and plan their comeback," she said.

The overall mobile handset market (smartphone and feature phone) grew 8 per cent year over year in the third quarter due to stronger consumer demand in the smartphone segment and stronger sales of feature phones.

Samsung led the overall market as well with a 22 per cent share, followed by Xiaomi (14 per cent), Vivo (11 per cent), Realme (10 per cent) and Itel (8 per cent).

"The Indian smartphone market is on a recovery path as the lockdown restrictions have been relaxed. The market has shown consistent growth for the last few months. It saw strong demand during the Independence Day period in August as major online platforms hosted massive sales," Counterpoint Senior Research Analyst Prachir Singh said.

September has always been a high sell-in month as brands prepare for the upcoming festive season and push stock in the channels, he added.

These savings are now being funnelled into smartphone purchases. Additionally, smartphones have become an integral part of consumers' lifestyle in this changing environment, he noted.

OnePlus remained the top brand in the affordable premium segment (Rs 30,000-45,000), driven by OnePlus 8 sales.

Counterpoint said a Basic Customs Duty (BCD) of 10 per cent was announced on display modules and touch panels, which will be effective from the next quarter.

This move by the Indian government will impact the cost of production since displays are majorly imported. But, it will boost the overall handset manufacturing ecosystem and local sourcing contribution, in the long run, it added.

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Hero MotoCorp will develop new Harley-Davidson motorcycles

Embarking on a new journey, India's largest two-wheeler maker Hero MotoCorp and US cult bike maker Harley-Davidson on Tuesday joined hands to sell and service the luxury bikes in India.

In a regulatory filing, Here MotoCorp said that the company will sell and service Harley-Davidson motorcycles,

and sell parts, accessories, general merchandise riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero’s existing dealership network in India.

As part of a licensing agreement, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name.

 

 

●       Hero will handle sales and after-sales for Harley-Davidson in India

 

●       Hero will develop a range of premium products, bikes under the Harley name

 

●       Future platforms could also be used under the Hero name

 

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UK-India 9th Economic and Financial Dialogue

Finance Minister Nirmala Sitharaman participated in the 10th India-UK Economic and Financial Dialogue on Global Responses to coronavirus through Video Conferencing.

FM Sitharaman said that aid that India-UK economic ties are important, as together they are two of the world’s top seven economies with a combined GDP of over $5 trillion.

She said, the trade between the two countries has more than doubled since the first EFD (eFunds corporation) in 2007, with bilateral investment supporting over half a million jobs across both countries. 

The Minister said that this session on sharing of experiences on coronavirus response domestic priorities and policies for economic recovery will help both countries refine their policies and help in learning to ensure better outcomes.

Sitharaman said India and the UK have a joint investment of up to 8 million pounds between their departments of biotechnology for research into factors leading to the severity of the novel coronavirus.

UK Chancellor of Exchequer Rishi Sunak conveyed to Finance Minister Nirmala Sitharaman that he appreciated India becoming the second largest PPE manufacturer in the world.

Sitharaman said the UK-India FinTech Joint Working Group met in March 2020 to seek greater acceptance of RuPay Cards in the UK. 

Further, speaking about the UK-India Capital Markets Working Group's initiative, led by the City of London Corporation, in partnership with the India UK Financial Partnership (IUKFP), she said for attracting inflows to India’s capital markets will help the economy.

"India-UK strategic collaboration helped to accelerate the development of GIFT City with Standard Chartered and HSBC opening offices in Gift City in 2020, becoming the first foreign banks to be licensed to operate an international banking unit," the finance minister said.

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Niti Aayog CEO on a clear 10 year program for Clean Energy

NITI Aayog CEO Amitabh Kant on Monday stressed on the need for a clear ten-year road map to boost clean energy technologies and creating standards for innovations. Kant also called hydrogen as the fuel of the future especially for commercial vehicles which can ensure efficiency in movement across the country.

Speaking at the India Energy Forum by CERAWeek, Kant said, "We should provide a 10-year roadmap on where we want to be in clean (energy) technology. We should provide policy clarity to innovation stakeholders because a lot of innovation will keep happening as we go along."

 Developing countries like India need to create standards for new technologies which sometimes become a hurdle for Indian entrepreneurs to disrupt the global market with local innovation, Kant said.

India should focus on strengthening standards and certification infrastructure.

Kant also showcased India's ambitious target of having 450GW of renewable energy by 2030 at the international forum.

About the role of traditional energy, he said, "We believe that hydrogen is an area where traditional energy companies can be a game-changer given the similarities in the engineering needs of oil and gas and hydrogen processing technology."

Traditional or conventional energy companies are looking at hydrogen and biofuels these days.

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Nestle plans to invest Rs 2,600 crore in India over the next 3-4 years

FMCG major Nestle India on Friday announced its plans to invest Rs 2,600 crore over the next three to four years to augment its manufacturing capacity in the country, terming the move as “vindication of confidence and trust” the company has in its Indian journey. The company, which saw a robust 10.23 per cent growth in its domestic sales in the July-September quarter, said its production units have returned to “normal output” post lockdown.

As per Nestle’s plan, the new investments are aimed at expansion activities of the existing units and towards the construction of its new upcoming unit in Sanand, Gujarat.

 Meanwhile, the FMCG major — which follows January-December financial year — posted a marginal 1.37 per cent drop in its net profit at Rs 587.09 crore in the third quarter ended September 30, 2020.

Its net sales, however, were up 10.19 per cent at Rs 3,525.41 crore during the period under review, the company said.

 Domestic sales in July-September moved up 10.23 per cent to Rs 3,350.10 crore as against Rs 3,039.09 crore in the year-ago period.

 Nestle, which presently operates eight production units in India, said its factories have returned to normal output and witnessed growth driven by an improved supply situation.

“Total sales and domestic sales both increased by 10.2 per cent driven by volume and mix,” Nestle India said in a post-earnings statement.

Its export sales were up 9.41 per cent to Rs 175.31 crore as against Rs 160.22 crore in the corresponding quarter a year ago.

 Commenting on the results, Nestle India Chairman and Managing Director Suresh Narayanan said: “The quarter witnessed growth driven by an improved supply situation, as our factories returned to normal output.”

 Nestle, which has a 108-year long association with India and nearly six-decade-long manufacturing journey, announced to deepen it by announcing further investments.

 “As a vindication of the confidence and trust in the Nestle journey in India, I am pleased to share that we plan to invest Rs 2,600 crore over the next three to four years to augment our existing manufacturing capacities, as well as towards our new under construction ‘state of the art factory in Sanand, Gujarat,” he said.

Nestle India said its profit before tax was up 12.40 per cent at Rs 786.50 crore over the same period a year ago.

 “Tax expense for the quarter ended September 2020 is not comparable. The cumulative effect of lower tax rate made applicable from April 1, 2019, was adjusted fully in the quarter ended September 2019. Net profit after tax and earnings per share are also not comparable for the same reason,” it said.

 According to Nestle, this quarter was boosted by double-digit growth in the in-home consumption of its key brands such as Maggi Noodles, Maggi Sauces, KitKat, Nestle Munch, Nescafe Classic and Nescafe Sunrise.

 Besides, demand in ‘Out of Home’ channels improved during the quarter but continues to be impacted due to the overall environment.

 “We continued our strong performance in the e-commerce channels, which grew by 97 per cent and now contributes about 4 per cent of domestic sales,” he said.

 Meanwhile, Nestle India in a separate filing informed that its board in a meeting held on Friday declared an interim dividend of Rs 135 per equity share of Rs 10 each for the year 2020 on the entire issued, subscribed and paid-up share capital.

 Nestle India board also approved the appointment of Matthias C Lohner, as whole-time director, designated as ‘Executive Director – Technical’ of the company with effect from November 1, 2020, for a term of five years, subject to requisite approvals.

 Earlier this week, its Swiss-based parent company Nestle while announcing its July-September quarter result had said: “India posted strong mid-single-digit growth, with good momentum in Maggi, Nescafe and KitKat.”

The Indian market was ranked at number 13 in terms of contribution to Nestle’s global revenue in 2019.

 Shares of Nestle India Ltd on Friday settled at Rs 15,863.00 on the BSE, down 0.30 per cent from the previous close.

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Agricultural exports recover from COVID-19 -induced fall

Exports of major farm products stood at ₹53,000 crores in the five months between April and August 2020-21, a rise of 14.8% compared to the corresponding period of 2019-2020, the export data show.

 Between April and June, or the first quarter, widespread trade disruption globally because of the pandemic and a lockdown caused exports of major farm products to fall 2.8% in value terms from the year-ago period. Exports turned positive following a pick-up from July. During the April to August period, farmers gained from higher exports of rice, wheat, sugar.

 Exports of basmati rice, a big-ticket export item among cereals, during April-August rose 8.2% to ₹13,660 from the year-ago period, while the value of non-basmati rice exports grew 91.3% to ₹11,570 crores, the data show.

 Goat and sheep meat shipments plunged 62.9% to ₹122 crore. Farmers benefited from a 43% rise in pulse exports to ₹1,039 crores. 

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India's export bounce back post Covid19

                                                   

India’s outbound shipments rose for the first time in seven months with merchandise exports registering a 6% growth in September—higher than 5.3% suggested by provisional data released earlier--driven mostly by an increase in demand for engineering goods, petroleum products, pharmaceuticals and readymade garments.

Major export commodities that grew in September include iron ore (109.7% at $303.42 million), ready-made garments (10.2% at $1.19 billion), rice (93.9% at $725.14 million), and drugs and pharmaceuticals (24.4% at $2.24 billion).

Since, March of this year, both exports and imports started declining in high double digits, even temporarily leading to a trade surplus in June for the first time in 18 years.

Aditi Nayar, principal economist, ICRA Ltd,  said that decline in gold imports in September suggests the pent up demand related to the lockdown period has been mollified. “However, imports may rise in the next two months with the festive and marriage season coming up, as well as the potential of a rise in rural demand after the kharif harvest.”

According to data released by the commerce and industry ministry on Monday, exports stood at $32.55 billion in March, taking the total tally in 2018-19 to $331 billion. While it is the first time that outbound trade has remained above $300 billion for two consecutive years, exports couldn't cross the government’s internal target of $350 billion. In the 2017-18 financial year, exports stood at $303.52 billion.

After such a long haul everything is getting back on track, and this is the time to proliferate your business and for that you can visit MAK India Business Solutions PVT LTD. We are a group of highly experienced professionals from various fields coming together with a sole objective to encourage the global entrepreneur and foreign investors to come and do business in emerging India at this Right Time.

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Indian Market is a pivot point right now for anything and everything

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Indian consumer durables market is broadly segregated into urban and rural markets and is attracting marketers from across the world. The sector comprises of a huge middle class, relatively large affluent class and a small economically disadvantaged class. Global corporations view India as one of the key markets from where future growth is likely to emerge. The growth in India’s consumer market would be primarily driven by a favourable population composition and increasing disposable income.

 

 Market Size

 

• India's gross domestic product (GDP) (at constant 2011-12 prices) was estimated to be Rs 145.65 lakh crore (US$ 2.06 trillion) for 2019-20, growing 4.2 per cent over the previous year.

• India retained its position as the third largest start-up base in the world with over 8,900-9,300 start-ups as 1,300 new start-ups got incorporated in 2019 according to a report by NASSCOM. India also witnessed the addition of 7 unicorns in 2019 (till August 2019), taking the total tally to 24.

• India's labour force is expected to touch 160-170 million by 2020 based on the rate of population growth, increased labour force participation and higher education enrolment among other factors according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

• India's foreign exchange reserves reached Rs 37.31 lakh crore (US$ 493.48 billion) in the week up to May 29, 2020 according to the data from RBI.

• Electronics hardware production in the country increased from Rs 1.90 trillion (US$ 31.13 billion) in FY14 to Rs 4.58 trillion (US$ 65.53 billion) in FY19.

 

Recent Developments                                                                                         

 

With an improvement in the economic scenario, there have been investments across various sectors of the economy. The mergers and acquisition (M&A) activity in India stood at US$ 28 billion in 2019, while private equity (PE) deals reached US$ 48 billion. Some of the important recent developments in Indian economy are as follows:

 

• In 2019, companies in India raised around US$ 2.5 billion through 17 initial public offers (IPO).

• India improved its ranking in World Bank's Doing Business Report by 14 spots over last year and was ranked 63 among 190 countries in the 2020 edition of the report.

• India is expected to have 100,000 start-ups by 2025, which will create employment for 3.25 million people and generate US$ 500 billion in value as per Mr T V Mohan Das Pai, Chairman, Manipal Global Education.

 

Investments

 

According to Department for Promotion of Industry and Internal Trade, during April 2000 – March 2020, FDI inflow into the electronics sector stood at US$ 2.79 billion.

 

Following are some recent investments and developments in the Indian consumer market sector.

 

• Consumer durable loans in India increased 43 per cent y-o-y to Rs 6,495 crore (US$ 921.4 million) in FY20.

• In January 2020, Godrej appliances announced plans to foray into air-cooler segment and acquire a market share of 15 per cent in the segment in the next five years.

• In May 2020, Philips announced investment of Rs 250-300 crore (US$ 35.47-42.56 million) to boost its manufacturing and R&D facilities in India.

• In December 2019, Kent RO Systems Ltd announced an investment of Rs 150 crore (US$ 21.46 million) to set up a new manufacturing unit over next three years.

 

Government Initiatives

 

The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aims to take it to 25 per cent of the GDP from the current 17 per cent. Besides, the Government has also come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy.

 

•           The Prime Minister of India, Mr Narendra Modi announced various economic packages, having a cumulative worth of around Rs20 lakh crore (US$ 283.73 billion) and being almost 10% of India’s GDP.

         

Pradhan Mantri Garib Kalyan Package (PMGK) was introduced in April 2020 to provide relief to underprivileged and help them fight the battle against COVID-19. The budget allocated to the scheme was Rs 1.70 lakh crore (US$ 24.12 billion).

• India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23.

• The Government of India is going to increase public health spending to 2.5 per cent of the GDP by 2025.

• For implementation of Agriculture Export Policy, Government approved an outlay Rs 206.8 crore (US$ 29.59 million) for 2019, aimed at doubling farmers income by 2022.

  

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