08 May 2017
New Delhi, 8th May 2017: According to International Data Corporation (IDC)’s Smartphone PULSE (Indian smartphone end consumer research study), Point of Sales techniques and Word of Mouth are the most prominent factors influencing the smartphone consumer’s purchase decision. Also, 2 out of every 3 smartphone buyers are male, every 2nd buyer is below the age of 25 years and more than 2/3rd of the consumers prefer touch and feel of the offline over convenience of the online.
IDC India Smartphone PULSE is an extensive smartphone end consumer facing research program covering 10 major cities of India. The face to face discussion with more than 4000 smartphone purchasers/users has given a rich and detailed understanding of the purchase journey of a smartphone buyer.
According to Himanshu Jain , Market Analyst, IDC India “Smartphone is now more of a status and style symbol than a mere communication and utilitarian device. Sheer number of smartphones choices in the market, peer pressure and the need to remain up to date with the latest technology are some of the factors driving the consumers in India to research, seek reviews and recommendations before buying a smartphone”
• As per the study, three out of four consumers take recommendations from family and friends (Word of Mouth)
• Two out of five consumers depend on in-shop promoters and retailers to decide their preference for a brand.
70% of smartphone consumers prefer offline channel over online primarily due to comfort and experience of touch & feel at these retail shops.
Offline retail is still the biggest sales channel in India contributing 2/3rd of smartphone sales in India. To address the width and depth of Indian market a few China-based vendors like vivo, OPPO, Gionee are investing a lot in branding and marketing campaigns to create brand awareness and availability in smaller towns and cities. Also, the nearest to home convenience of stores followed by retailer trust with wide variety of options gives consumers comfort to go for offline purchase of smartphones.
• Three out of five consumers who buy offline are influenced by family, friends and colleagues;
• Latest features and specifications remain priority for two out of five offline buyers; and
• One out of three are influenced by the retailer and promoter push.
With the growing trend of online-only models, pre-booking and flash sales, around one third of consumers prefer to purchase online.
Online channel is very competitive since smartphones contribute a large portion to overall sales for all e commerce players. The investments by Amazon and Flipkart to improve user experience, reduce delivery time and entering exclusive alliances with smartphone vendors clearly show that online players are making serious efforts to gain consumer trust.
The online market in India is driven by the following:
• One out of every two online consumer prefer e-commerce due to the convenience and ease of comparing different smartphone models
• One out of four are influenced by perceived low price and offers like EMIs, Exchange offers etc.
“The Indian smartphone consumer is looking for value-for--money smartphones that fit their budget, while offering the latest technology. With more than 40% overall share of smartphone segment in India, China-based vendors are investing a lot in offline promotions and branding to lure consumers. These brands are now perceived to be offering great quality products, with good design, latest specifications and focused high decibel communication on features like selfie camera and extended battery life, these vendors are setting a new trend in the industry” says Sachin Mehta , Market Analyst, IDC India.
IDC Smartphone PULSE study also provides deep dive analysis on the smartphone spends variation, from intended vs actual spend and upgrades from last smartphone purchase.
• Two out of three consumers increased spend on smartphones to US$100-US$200 from less than US$100 spent on previous smartphone purchase
• Two out of five consumers who earlier spent more than US$200, spent around $100-$200 on their latest smartphone.
US$100-US$200 is the most crowded price band with high decibel marketing and promotions by all vendors giving consumers a smorgasbord of smartphone models with high specifications offering great value for money. Major vendors in this segment are Samsung, Xiaomi, Lenovo Group, OPPO and vivo.
Factors impacting spend variations are availability of perceived better quality devices with high specifications at affordable price points, retailer and promoter influence at the “moment of truth”
The smartphone demand from Tier 2&3 cities is outgrowing demand from Tier 1 cities as urban markets have begun to saturate. Vendors are looking to tap consumer base in Tier 2&3 and rural areas by setting up robust offline distribution network.
One of the major drivers of this is rapid expansion and promotion of 4G network footprint by telecom operators in India, led by Reliance Jio. This is compelling customers across city tiers to be future ready, by choosing more 4G than 3G devices, with more than 80 percent of the smartphones being 4G compatible across all city tiers.
China based vendors have understood this trend and are gradually building and investing significantly in the offline distribution network in Tier 2 cities and beyond. This shows that the offline channel remains significant and the vendors have understood to address the needs of a diverse Indian consumer base, offline must go hand in hand with the online channel.
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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and Events Company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.
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