Indian smartphone market is now becoming a strong online market

Indian smartphone market

The Indian smartphone market has always been an offline market. Indian buyers prefer to walk into a physical store and purchase a device. This is why Xiaomi which has been the number one smartphone brand in India for many years has a plethora of physical stores in India. However, things are now changing. The prolonged pandemic coupled with large casualties from the second wave in 2021 is changing the digitalization of India. According to Counterpoint Research, more than half of smartphone consumers in the country chose to buy online this year. This is significantly higher than last year where only about one-third choose online.

Indian smartphone market

While COVID-19 has made smartphones an indispensable part of life, due to activity restrictions, many offline consumers have also been pushed to online platforms. In addition, the reverse migration of knowledge workers from large cities to small towns has also played a key role in the popularization of online channels. In addition to new consumers, there is also a strong stickiness among consumers who have already used online channels.

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The transition to a digital platform requires people to step out of a certain comfort zone. However, this anxiety has been relegated to a secondary consideration in the Indian smartphone market. With the impact of the pandemic on the offline market, online shopping is clearly a safer (and sometimes the only) alternative. Of course, in addition to the pandemic, there are more reasons to choose online rather than offline. Respondents said that unique discounts, multiple choices, and prices are the main reasons why they prefer to buy smartphones online.

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Counterpoint Consumer Research in 2020 and 2021

The impact of the pandemic on consumers’ smartphone purchase budgets disappeared quickly:

  • In 2020, many respondents who purchased 20,000 Indian rupees ($264) and above plan to reduce their budget for their next smartphone.
  • In 2021, the entry-level flagship and high-end market segments will become more prominent.

According to the survey results, from 2020 to 2021, the share of smartphone users with less than 30,000 Indian rupees ($396) has declined.

As a result of working from home, the respondents had more savings than usual. In addition, with more virtual connections online, smartphones have become an indispensable part of life. Therefore, the market has changed, and a large portion of smartphone users will consider a higher price point.

We can call this transition “online digitization”. This is because, in addition to their preference for online channels, people also rely on YouTube anchors for information. They also rely on online influencers’ opinions to obtain smartphone purchase information. The survey results show that there has been a significant shift from reliance recommendations by friends/family in 2020, to reliance on YouTube videos and technology opinion leaders’ opinions in 2021. This change is a result of the social distancing and working from home due to COVOD-19.

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