Russia Online Smartphone Sales Highest Ever in Q2 2020

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Russia Online Smartphone Sales Highest Ever in Q2 2020

Press releases
/ Aug 18, 2020
/ Team Counterpoint

M.Video-Eldorado led online smartphone sales with a 35% market share during Q2 2020
Total online smartphone market share reached its highest ever with 32% in Q2 2020
Huawei, including Honor, led online platform sales, followed by Samsung and Xiaomi

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – August 18, 2020

Online smartphone sales in Russia grew by more than 56% YoY during Q2 2020, according to the latest research by Counterpoint Research Model Sales Tracker June 2020. The total online smartphone market share reached its highest ever at 32% during Q2 2020. The increase in online channel sales is due to the shift in consumer behaviour, upgrade of devices to work from home smoothly and the availability of popular smartphones on online platforms. After the restoration of normalcy in retail operations, online smartphone sales will stabilize while competition will increase among online smartphone platforms. The COVID-19 pandemic had a huge impact on the Russian smartphone market. After seeing a record decline in April, it bounced back in May. Top five smartphone brands — Huawei, Samsung, Xiaomi, Apple and OPPO — accounted for 86% of the total smartphone market during this quarter.

Commenting on the market dynamics, Research Associate Soumen Mandal said: “M.Video-Eldorado and Svyaznoy are leading players among online smartphone platforms while Citilink, Megafone, Beeline, MTS and DNS are emerging players. More than one-third of smartphone sales happened on the M.Video-Eldorado platform during Q2 2020. The balanced operation between online and offline platforms and promotional activities helped M.Video-Eldorado to maintain a dominating position in online channel sales. Contactless online delivery through Yandex.Taxi, Gett Delivery or local partners helped it cover 90% of people under its next-day delivery. Besides, dark store automation, partnerships with Ozon and X5 Retail Group, and the shifting advertising focus towards online business accelerated online smartphone sales on the M.Video-Eldorado platform.”

Mandal added: “Small players like Black Fox, CAT, Ginzzu, Dexp and Coolpad are still relying on offline channel sales. Among the top five smartphone players, Apple is the most dependent (74%) on offline channel sales. The average cost of a smartphone purchased from an online channel increased by 15% to reach $210 during Q2 2020 compared to $182 in Q2 2019. This also shows the recovery of Russian economy from the global pandemic. On offline platforms, the best-selling models are the Samsung Galaxy A51, Honor 8A, Apple iPhone 11, Samsung Galaxy A10 and the Samsung Galaxy A30s. Apple leads in total revenue during this quarter, but it slipped to the second position after Samsung in online channel revenue.”

Exhibit 1: Russia Online Smartphone Market Share by Channel – Q2 2020

Commenting on brand performance, Associate Director Tarun Pathak said: “Huawei remained the market leader in online channel sales with 35% market share. Samsung Galaxy A51 was the top model for online channel sales, followed by the Honor 8A, Honor 20 Lite, Honor 10i and the Apple iPhone 11. Xiaomi took the third position in online channel sales after Huawei and Samsung but was second after Huawei in terms of online share of total brand sales. Online market share at the end of 2019 stood at 15.7% only. We believe COVID-19 has acted as a catalyst to change consumer behaviour in Russia. However, people still prefer cash on delivery for online smartphone sales. The penetration of online channel sales will increase in the future with the adoption of digital payment systems.”

Pathak added: “The growth of premium smartphones like the Apple iPhone 11 and iPhone SE 2020 on online channels was noticeable due to change in the Ruble exchange rate and the desire of consumers to upgrade their old devices. Moreover, the decreasing spend on vacations allowed Russian consumers to upgrade their existing devices. Premium brands like Apple may face problems in coming times if the Russian government implements its decision for mandatory installation of Russian-made software on a smartphone from January 1, 2021.”

Exhibit 2: Russia Online Smartphone Top Brands Share – Q2 2020

Analyst Contacts:

Soumen Mandal

Tarun Pathak

Counterpoint Research

press(at)counterpointresearch.com

Team Counterpoint

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