Bangladesh’s mobile phone market returned to growth in 2019 with a 4.1 percent annual growth, shipping 29.6 million units during the year, said a new report released from New Delhi on Monday.
Feature phones continued to dominate with 76.6 percent share and 22.7 million units shipment with a 4.9 percent annual growth, according to the International Data Corporation’s (IDC) Worldwide Quarterly Mobile Phone Tracker, 4Q19.
In the smartphone category, a total of 6.9 million smartphones were shipped in 2019 with a 1.4 percent year-over-year (YoY) growth.
The last quarter of the year (4Q19) saw the healthy growth in the overall mobile phone shipments as the category grew 19.5 percent YoY and 16.2 percent from the previous quarter, contributing 8.8 million shipments to the year.
In June 2019, the government of Bangladesh increased the customs duty on the import of completely built units (CBU) of the smartphone to 25 percent from 10 percent earlier, resulting in a 4.1 percent decline YoY in 2H19.
However, as feature phones were left outside of this increased duty structure, it saw a strong recovery with 20.1percent YoY growth in 2H19.
The China-based vendors continued to launch higher-priced smartphone models with better specifications.
This helped the average selling price (ASP) of smartphones to reach $99 with a 5.7 percent YoY growth in 2019.
The share of 4G-enabled smartphones reached 69 percent with 50.4 percent annual growth in 2019.
However, 3G smartphones still hold 31 percent category share, primarily because these smartphones were selling at less than half of the price of a 4G smartphone. Also, due to limited coverage and poor quality of the 4G network, users are still reluctant to upgrade.
“Despite modest growth, the country saw a shift in local manufacturing as three out of four smartphones shipped in 4Q19 were locally assembled from just one-fourth smartphones assembled in 1Q19,” says Ekta Mittal, Market Analyst, Client Devices, IDC India.
“Walton was the leading vendor in local production as it assembles all its devices in the country. Among the global vendors, Samsung assembles almost all of its smartphones in the country but still depends on import of feature phones. Also, OPPO and vivo had started their local production from 2H19 and a few more vendors are expected to set up their local production in the coming months,” said Mittal.
Commenting on the recent growth of local assembly, Jaipal Singh, Associate Research Manager, Client Devices, IDC India said as the local governments continue to discourage the CBU (Completely Built Units) import across countries, it is putting immense pressure on global vendors to diversify their production plants in key geographies to meet the local demand.
Singh said this provides an opportunity to reduce the dependency on China.
“At the same time, it also brings a lot of challenges, starting from managing the overall cost, inventory, and production, especially when the domestic demand is limited, and manufacturing is largely restricted to assembling of devices locally and all the components still have to be imported.”
“As vendors settle their production challenges, we expect a gradual shift to smartphones in the coming years. However, the 4G network coverage and data pricing will play a critical role in this transition,” Singh said.