Smaller Cities to forefront Smartphone growth in India

It's a riot in India's burgeoning smartphone market wherein the industry is pegged to expand steadily in 2016. Smartphones will continue to be the engine for the market's growth and it predicted a 37% growth in the current year over a 32% average growth for past three years. While the numbers suggest the chaos is limited to the metros and tier I cities, tier II and III cities are expected to play a major role in the near future. Indeed, the Chinese smartphone brands, have turned it on its head forever and changed everything.

There are several reasons for the market to grow speedily, the host of new brands, both indigenous and international, which has bought intense competition. The makers now have started focusing on making their phones affordable which in turn has lowered the margins. There is a lower entry price set for smartphones almost every month. Certainly, this huge fall in price and the number of options is converting a lot of feature phone users into smartphone buyers.

One of the key trigger for the growth in the segment, shall be fuelled by 4G. The Technological jump has brought a shift in the usage of the smartphone which is no longer a device to just make a call. The high speed internet in the remotest areas is facilitated by Smartphones.

Next being, the e-commerce model for the sales of the smartphones. Several brands have opted for the exclusive route which has opened a new channel of distribution. The ecommerce has been the game changer for the Industry which is not just limited to smartphones, but have influenced the gadget market in India as Mobiles take a greater percentage of total ecommerce retail sales. The biggest impact of retailing itself, has boosted the sales. Lastly in last few years, we also saw EMI options from smartphone makers, which have made them affordable.

To summarize, the smartphone consumers in tier 2 and 3 cities are becoming more aware and demanding. 4G and expansion of reach to Tier II and Tier III markets, besides the rural hinterland are expected to be the main reasons behind the growth to the smartphone market in India. The 4G revolution promises to trigger the next wave of smartphone growth with 4G enabled devices already overtaking 3G devices as the largest smartphone category, there is a clear trend of migration from feature phones to low-end smartphones in smaller cities and towns, making these markets the next growth engine for the smartphone industry. With the first time mobile phone users coming on a smartphone, it will be their only connected device which meets all of their internet and entertainment needs. Chinese vendors shall gain the market share due to their superior positioning as quality brands, with a value for money proposition. The top five cities of India shall make up nearly 60 per cent of the online smartphone sales in India.

Authored by: Deepak Gupta, Director, Josh Mobiles