Smartphone sales in the June quarter; impact on rigid boxes

Smartphone sales have notched up 35.3-million sales in Q1 of 2024. This will impact the rigid box industry in India which industry experts state is approximately Rs 20,000 crore.

02 Jul 2024 | By Anhata Rooprai

According to Canalys, the Indian smartphone market maintained a strong performance in Q1 2024, reaching 35.3-million units. Vendors entered 2024 with improved inventory. The market saw a 15% year-on-year growth, owing to the lower base of Q1 2023, which faced inflationary pressures, weak demand, and stockpile issues.

Samsung maintained a top spot in Q1 2024 with a 19% share and 6.7-million units shipped. Xiaomi secured the second spot, shipping 6.4-million units, driven by its ongoing mass-market 5G strategy. Vivo claimed the third position with 6.2-million units shipped. Oppo (excluding OnePlus) and Realme completed the top five with shipments of 3.7-million and 3.4-million units, respectively.

The domestic production and export of smartphones have been increasing gradually, especially since the Production Linked Incentive (PLI) was launched in 2020. FY20 was the first time domestic production exceeded domestic demand, taking smartphones to the top of India’s export categories. According to the Economic Survey of India, a 42.2% increase in exports in FY24 (on a YoY basis) enabled smartphones to rank among India’s top five export items, considered six-digit HS product categories.

Apple assembled 14% of its global iPhones in India in FY24. Foxconn invested in the states of Karnataka and Tamil Nadu to set up new manufacturing plants for components.

According to the ESI, India also became the world's sixth-largest smartphone exporter in 2022, from the 23rd-largest smartphone exporter in 2014. This high export growth has led to an increase in the ratio of exports to production, with exports being above 31 per cent of the total output of smartphones in India in FY24.

According to Counterpoint Research, there might be a 3 to 5% deficit in shipments in the June quarter, because smartphone brands will want to clear out existing stock before the festive season in the next quarter. 

Another study conducted by Counterpoint Research in June showed that realme was the most popular smartphone brand among the Indian youth. The respondents of this survey used the words young, modern, and playful to describe the brand. 62% of the respondents think it offers the latest technology, 63% think the products are valued for money and 61% think the design is stylish in the sub-Rs 20,000 segment.

Amid the push for localisation from the government, vendors must focus on restructuring local distribution, leveraging local manufacturing partners and appointing Indian leadership. According to the report, they also need to enhance user experience and educate consumers for effective device engagement. The key is: Expanding into smaller cities and bolstering mainline retail.

Other than smartphones, some uses of rigid boxes include packaging luxury goods, such as high-end cosmetics, perfumes, jewellery, watches, and designer clothing. Also are used for packaging electronic devices, such as tablets, laptops, cameras, and high-end audio equipment, to protect during shipping while creating a premium unboxing experience for customers. 

A rigid box expert who spoke to WhatPackaging? said, "The increase in the demand for devices compatible with 5G would impact smartphone sales and help overcome the impact of a tentative first half of the year. Owing to the phased manner in which the quinquennial general elections were conducted, there were fewer smartphone launches in the second quarter of 2024. Inevitably, this will have impacted the sales of rigid boxes for the devices too."

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