India’s smartphone market is emerging as a strong online market

The Indian smartphone market has always been an offline market. Indian shoppers prefer to walk into a physical store and purchase a device. This is why Xiaomi, which has been the number one smartphone brand in India for many years, has a plethora of physical stores in India. However, things are about to change. The protracted pandemic coupled with the many victims of the second wave in 2021 is changing the digitization of India. According to Counterpoint search, more than half of the country’s smartphone consumers have chosen to shop online this year. This is significantly higher than last year, where only about a third are choosing online.

While COVID-19 has made smartphones an indispensable part of life, due to activity restrictions, many offline consumers have also been pushed into online platforms. In addition, the reverse migration of knowledge workers from big cities to small towns has also played a key role in popularizing online channels. In addition to new consumers, there is also a strong uptake among consumers who have used the online channels before.

The transition to a digital platform is forcing people to step outside of a certain comfort zone. However, this anxiety has taken a back seat in the Indian smartphone market. With the impact of the pandemic on the offline market, shopping online is clearly a safer (and sometimes the only) alternative. Of course, in addition to the pandemic, there are more reasons to choose online rather than offline. Respondents said that unique discounts, multiple choices and prices are the main reasons they prefer to buy smartphones online.

Counterpoint Consumer Research in 2020 and 2021

The impact of the pandemic on consumers’ smartphone purchasing budgets quickly wore off:

  • In 2020, many respondents who bought 20,000 Indian rupees ($ 264) and more plan to cut their budget for their next smartphone.
  • In 2021, the entry-level and high-end flagship market segments will become more prominent.

According to the survey results, from 2020 to 2021, the share of smartphone users with less than 30,000 Indian rupees ($ 396) decreased.

Due to working from home, respondents had more savings than usual. Moreover, with more and more online virtual connections, smartphones have become an indispensable part of life. Therefore, the market has changed and a large part of smartphone users will consider a higher price.

We can call this transition “online digitization”. This is because in addition to their preference for online channels, people also rely on YouTube anchors for information. They also rely on the opinions of online influencers for insight into smartphone purchases. Survey results show that there has been a significant shift from trust recommendations by friends / family in 2020, to trust in YouTube videos and the opinions of tech thought leaders in 2021. This shift is the result of social distancing and working from home due to COVOD-19.