According to GfK Market Intelligence Report, in the first half of 2022, value growth of 44% YoY in the smartphone segment is observed vis-a-vis 2021. As consumers shift back to pre-pandemic normalcy is a major driver for an uptick in smartphone growth at the back of hybrid work culture.
“The offline channel growth of smartphones reached 2019 sales levels in 2021. In 2022, it is projected to grow by 25-30% over 2021 by value in offline channels; thus the year ahead looks optimistic complemented by festive season sales. All of this is possible due to, we Indians, coming to Normalcy 38% faster than the rest of the world” explains Dheeraj Mukherjee, Head of Sales – India, GfK.
The contribution of the>20K price band category has evolved from approximately 17% in 2017 to 40% in H1’22 in the offline market. This signifies that there is a 2.5X jump in the contribution of +20K handsets from 2017.
The 20k+ price segment shows growth across all tier cities- with Tier 4 cities witnessing maximum growth in the price segment in H12022 vis-à-vis H12019 at a staggering 240% growth followed by Tier 3 cities with 186% growth, Tier 2 at 162% growth, and 86% growth in Tier 1 cities. Tiers 5 and above cities witnessed over 120% growth. The contribution in the same time period was led by Tier 1 cities at 59%.
As per GfK’s Consumer Life Study 2022, surveyed amongst the Indian urban consumers, especially the younger demographic it was observed that 64% like to be seen with the latest tech products. While 46% of the them used an electronic payment service like UPI, Paytm, or GPay. Post-pandemic the element of convenience is a big factor that influences purchase decisions – 62% of Indian consumers want tech which knows them and can make recommendations, thereby making their day-to-day life easier. These trends cumulatively can offer to be a tailwind opportunity for smartphone retailers in the Indian market.
The ASP of smartphones has increased up to 34% in 2021 vs 2017 while it increased 65% in 2022 O2 vs 2017 Q1. This positive uptick is an opportunity for both manufacturers and retailers to garner profit in the coming quarters; basis data by GfK.