Retailers Are Hoping for a Redeeming Festive Season in Smartphone Sales

The festive season in India is always a highly anticipated period for retailers, especially those in the smartphone market. Starting with Ganesh Chaturthi and ending with Diwali, this season is marked by a surge in consumer purchases, supported by attractive festive discounts and alluring offers.

A Festive Push for Higher Sales

Retailers have high hopes that the festive season will boost sales volumes significantly after a somewhat slow second quarter this year. Gifting traditions during festivals and significant price cuts encourage consumers to change or upgrade their smartphones, driving up sales.

The two biggest e-commerce platforms in India, Amazon and Flipkart, are set to host their much-awaited annual sales—Amazon Great Indian Festival and Flipkart Big Billion Days—come October. These sales events are expected to significantly contribute to the sales surge. However, before these major events, Independence Day, Navratri, and Dussehra also host large online and offline sales, keeping the momentum going.

What the Numbers Say

According to Tarun Pathak, research director at Counterpoint Research, India’s smartphone shipments are projected to hit 157 million units this year. This is an increase from last year’s 153 million units, translating to a 4-5% growth in shipment numbers.

“We are expecting 4-5% growth in terms of numbers, (that is) shipments. Value wise, it will be close to 8-9% as ASP is growing,” Pathak mentioned in a recent interview with The Core.

This positive outlook is further corroborated by the recent United Nations Budget for 2024. The Union Budget, tabled by Finance Minister Nirmala Sitharaman in the parliament, proposed a reduction in customs duty on mobile phones, chargers, and printed circuit board assemblies (PCBAs) from 20% to 15%. While analysts predict this won’t lead to immediate price drops, it is expected to make smartphones more affordable in the long run, further driving sales.

Considering Long-Term Growth

The Indian smartphone market has witnessed various dynamics over the past years, with competition intensifying as multiple brands strive for dominance. The market has not only been growing in numbers but also in terms of Average Selling Price (ASP). Pathak emphasized that the value growth might reach close to 8-9% as consumers gravitate towards higher-end models with better features.

This growing trend of consumers opting for premium smartphones is an indicator of maturity in the Indian market. Previously, budget and mid-range smartphones dominated the landscape. However, recent years have seen a marked preference for premium devices, which offer better specifications and improved user experience.

Challenges and Opportunities

While the projected growth is promising, it is essential to consider possible obstacles. Supply chain challenges, global semiconductor shortages, and fluctuating consumer sentiment due to economic uncertainty can impact the market. However, India’s youthful demographic and ever-growing digital ecosystem offer a substantial opportunity for smartphone manufacturers.

Moreover, the continuous rollout of 5G technology and improvements in mobile internet infrastructure are expected to push the market forward. With many consumers looking to upgrade to 5G-enabled devices, there is a potential demand surge anticipated in the coming months and years.

Looking Forward

As the festive season approaches, retailers and manufacturers are gearing up to capitalize on the anticipated growth through a combination of strategic pricing, formidable marketing campaigns, and exclusive launches. Pathak’s forecast of 157 million shipments marks a positive trajectory for the Indian smartphone market.

For consumers, this period brings with it exciting deals and new models, while for retailers and manufacturers, it presents an opportunity to rebound and capture a larger market share. All eyes will be on the upcoming months as they promise to be a litmus test for the strength and resilience of India’s smartphone market.