10th Mobility India Conclave and Excellence Awards unfolded in New Delhi, acted as a pivotal platform that not only recognized exceptional contributors to the mobility industry but also facilitated the exchange of experiences among industry experts, celebrating innovation and excellence that significantly impacted India’s dynamic mobility sector.
During the event, Ms. Shilpi Jain, Senior Analyst at Counterpoint Research, presented an insightful overview of the Indian smartphone market, shedding light on its current status and prospects, the emerging technologies for the future and the growth trajectory of the Indian smartphones in the global scenario.
- Current Scenario:
India emerged as the second-largest smartphone market globally, showcasing resilience amid a 5% year-on-year (YOY) decline in the global smartphone market in 2023. Notably, India exhibited a marginal 1% decline, affirming its robust position. Despite the global downtrend, India’s smartphone market is poised for accelerated growth, outpacing the global market.
- Market Transition and Growth Trajectory:
The Indian smartphone market experienced a transition, moving from a decline of 9% YOY last year to stability in growth. Quarter 3 of the current year marked the reversal of the declining trend, with expectations of growth in Quarter 4 driven by an extended festive season and 5G upgrades. Forecasts for the next year anticipate a 5% YOY growth, propelled by positive consumer demand.
- Key Drivers Fuelling Growth:
5G Momentum: Despite rapid 5G adoption, penetration in the affordable segment (defined as the $155 segment) remains low at less than 3%. Notable players in this segment include XIAOMI, LAVA, and Trangen brands. The affordable segment represents a significant growth opportunity, with expectations of more brands joining in the next year.
- Premiumisation Trend:
The premiumisation trend continues to gain momentum, evident in strong demand for the ultra-premium segment. Consumers, opting for higher-priced devices, are influenced by the availability of financing, contributing to nearly 60% of transactions in the premium segment. Financing plays a pivotal role in making premium devices more accessible to a broader demographic, driving the upward trajectory of premiumisation.
- Online Channels:
Online channels reached their zenith during the COVID-19 era and continue to thrive due to brand initiatives expanding offline reach, increased consumer preference for in-person product interaction in premium segments, and efforts to align pricing and offers across both online and offline channels. The collaborative efforts of brands, OEMs, and retailers have reduced pricing and offer disparities between online and offline channels.
- Rural India’s Untapped Potential:
Rural India remains under-penetrated in terms of smartphone usage, offering substantial growth opportunities for OEMs and ecosystem players. Approximately 40% of the population still lacks access to smartphones, presenting a vast untapped market with significant growth potential.
As per Ms Shilpi Jain, the key takeaways and future projection were internet connectivity. Despite significant strides, over half a million people still need to be connected to the internet. The smartphone market is poised for growth, with an estimated 5% growth next year and a further 7% in the subsequent year.
The ultra-premium price range is anticipated to witness double-digit growth in the coming year, contributing to an increase in smartphone Average Selling Prices (ASPs).Aggressive domestic manufacturing, fuelled by favourable government policies, is evident. India’s global share in headset production is expected to reach 20% by the end of 2024, attracting major OEMs like Google.
Moreover, 5G penetration is projected to reach 52% by the end of 2023, escalating to 70% in 2024. The fusion of 5G in the lower price range will be a pivotal factor. While the online market share peaked at 49% in 2022, estimates suggest a slight decline to 45% this year and the next, reflecting the evolving dynamics between online and offline channels.
Ms. Shilpi Jain says, “The convergence of technological trends, consumer preferences, and strategic industry initiatives positions India as a dynamic player in the global smartphone market. As the nation embraces 5G, premiumisation, and online-offline synergy, the outlook for the future remains promising, supported by untapped rural markets and aggressive domestic manufacturing initiatives.”