Aspirational purchases, along with exchange offers and EMI-based financing schemes, has led to a 25% year-on-year growth in value of smartphone sales in the first leg of the festive season.
The premium segment grew almost 50% on Flipkart driven by the iPhone 14 and Galaxy S21, while on Amazon the segment saw 200% growth driven by the iPhone 13 and Galaxy S23.
“For the first time ever, iPhone sales crossed 1.5 million units in the first week of festive sales,” analysts at tech research firm Counterpoint said in a note. In volume terms, smartphone sales have grown 9% as compared to a decline of 2% in the year-ago period, Counterpoint said. Both Flipkart and Amazon clashed with their flagship sales that was live between October 8 and October 15.
However, entry level smartphone sales have continued to struggle. The organic move of customers from feature phones to smartphones is almost nil this season due to income pressures and inflation, said Navkendar Singh, associate VP at market research firm IDC.
“Rs 50,000+ (price segment of phones) is seeing the maximum growth, Rs 35-40,000 is also growing, but sub-Rs 15,000 is declining,” Singh said. According to IDC, the overall smartphone market in 2023 will likely remain flat or decline marginally as compared to 2022.
“Two Indias emerged in the first week of this festive season: one, that is holding on to spending to buy premium products at the right prices and one that, is shopping more frequently but spending on value-for-money products,” Abhishek Tandon of consulting firm Redseer said.
According to Redseer, online platforms clocked a gross merchandise value (GMV) of roughly Rs 47,000 crore in the first week of the season growing at 19% from 2022, and mobiles, electronics & large appliances together drove 67% of these sales.
“While entry level smartphones remain impacted, upgrades to 5G-enabled models are driving the season,” Shilpi Jain of Counterpoint said. The Rs 10,000-15,000 price segment witnessed faster 5G upgrades as OEMs like Realme, Vivo and Samsung launched 5G devices in the price band.
According to Flipkart, the premium smartphone segment grew 1.7X over the 2022 festive sale. “There was 1.5X growth seen in customers opting for mobiles exchange and 2.6X growth seen in customers availing no-cost EMI, compared to the previous year,” the e-commerce giant said in a note. Online and offline prices of smartphones are almost at parity as days of deep discounting by e-commerce players are over, the founder and chairman of All India Mobile Retailers’ Association Kailash Lakhyani said.