Falling prices fuelled by growing competition, the ease of access to content and language localisation and government incentives for locally made electronics products have powered smartphone penetration to record levels.
Management consulting business Zinnov has released a study revealing 81 million smartphones were shipped in 2014, with a stunning 51 per cent quarter-on-quarter growth through the year. Smartphones are already outpacing the growth of feature phones and are expected to show a massive 36 per cent CAGR over the next five years to reach 651 million handsets by 2019.
Zinnov’s study, ‘India Smartphone Market: Witnessing Exponential Growth’, describes India as on “the cusp of digitisation, mainly driven by mobility”.
The “unstoppable surge of smartphones” in India continues with 29 per cent of the 409 million urban population now using the devices.
“Smartphone users in mini metros and Tier-I/II cities show an evolved usage of smartphone, similar to that of large metros. In fact, the study highlighted that smartphone users in mini metros and Tier-I/II cities match their large metro counterparts’ with regard to usage of online apps and browsing.”
The study said local Indian phone vendors, though commanding a major share, are facing stiff competition from Chinese vendors. Chinese brands are gaining prominence, with Xiaomi recently surpassing all other brands in sale of 4G LTE smartphones; Micromax is also threatening the dominance of Samsung in the market.
“With consumers spoilt for choice, domestic smartphone vendors will have to increasingly focus on streamlining operational processes and investing in R&D for differentiation,” said Arvind Rawat, engagement manager – market expansion advisory, with Zinnov.
Smartphone vendors are also adopting new and innovative Go-To-Market (GTM) strategies
like online exclusives (for example Motorola selling on Flipkart), experience centres to facilitate customer experience (Xiaomi plans 100 across India), bricks and mortar store growth (India’s Gionee is planning 250 stores) and hardware differentiation in order to gain traction in the highly competitive Indian market.
The study found smartphones are also changing the way consumers shop. Right from user research to product purchase anytime and anywhere, smartphones are an emerging point of purchase.
“And to address the demand from Tier 2/3 cities and changing consumer shopping pattern, eCommerce companies are increasing their focus on mobile commerce,” said the report.
The full report can be read online.
