Even as the global smartphone industry continues to grapple with the ongoing component and chip shortages, the pent-up demand is set to drive growth for smartphone sales in India during the festive shopping season.
As per a latest report by Counterpoint Research, almost $7.6 billion worth of smartphones will be sold during the ongoing festive season, which kicked off during the first week of October when online platform giants Amazon and Flipkart announced their marquee Great India Festival and Big Billion Days sales. The season will end on November 4 with the Diwali festival.
“This highest ever number is coming at a time when the global smartphone industry is facing component shortages. As a result, OEMs have been forced to increase prices, which will have a higher impact on the mass market and budget segments,” senior analyst Prachir Singh said.
He said that the festive season has been driving smartphone sales in India due to high consumer demand during Dusshera and Diwali. “This trend has been accelerated this year by the high pent-up demand backed by aggressive promotions in the mid and premium segments,” he said.
Counterpoint’s research director Tarun Pathak said that the retail average selling price or ASP of the market will grow at 14% year-on-year, even as the growth in market value during the 2021 festive season is expected to be 1% year-on-year.
“The overall consumer sentiment has been positive going into the festive season. Many consumers have decided to spend from their accumulated savings for something that is more personal. This trend will drive a faster smartphone upgrade during the festive season,” Pathak said.
The market tracker said that the 2021 festive season is seeing higher trade-ins and aggressive EMIs that increase device affordability and help consumers bypass multiple price barriers.
“This has helped drive the sales of mid-to-high tier (>$200) smartphone models and, subsequently, the overall ASP. Many OEMs sensed this trend and brought out aggressive offers on premium devices. The relatively higher sales of premium segment smartphones also helped offset the losses in the mass market due to price hike,” Pathak said.
Separately, another Indian market tracker, TechArc said that smartphone sales could reach $16.9 billion during the whole festive quarter of October-December 2021.
The revenue contributions will be led by the Premium segment (Rs 25,000-50,000 or $334-$668) contributing 51.7% of the total revenues during the quarter, TechArc said. By volume sales, the Mid segment (Rs 12,000-25,000 or $160-334) will drive contributions with 42.1% of smartphones sales in this segment.
“With over 49.9 million smartphones expected to sell during Oct-Dec 2021 quarter, the sales contribution of the quarter by revenue and volume is estimated at 56% and 32% respectively,” TechArc analyst Faisal Kawoosa said.
He said that the channel contribution is witnessing a shift where mid, premium and luxe category smartphone sales are increasing compared to the earlier view where the basic segment would drive online sales.
“…there is an abundant choice of 5G smartphones available in the online channels. “The leading marketplaces of Amazon and Flipkart are offering more than 50 5G smartphone models. Samsung leads with 20 5G smartphone models available followed by Realme with 12 options for customers to choose from, while looking for a 5G smartphone online,” he added.