According to IDC latest India Monthly City-Level Smartphone Tracker, the major 50 cities of India accounted for 50% of smartphone sales in the third quarter of 2017 with a sizeable growth of 27% from the previous quarter. Tier I cities of India continue to be the key volume driver for the Indian smartphone market with 29% sequential growth in the third quarter. Bhopal, Gurgaon and Jaipur from the Tier II cities have emerged as the fastest-growing cities, with each growing more than 40% from the previous quarter.
Metro cities of India remain the major contributors to the smartphone sales in India, with Delhi and Mumbai contributing one quarter of the total sales in the top 50 cities. However, with the availability of inexpensive and large amounts of data and 4G penetration, the demand from Tier I and Tier II cities continues to attract the smartphone vendors. Vendors are notably diversifying their sales and marketing strategies. Also, the e-tailers are expanding their presence in most of the cities to cater to the demand coming from these markets. Himanshu Jain, Market Analyst with IDC India said:
“Mega-online sale(s) by prominent e-tailers acted as catalyst for the robust growth across city tiers with e-tailers now contributing around 40% of the market in top 50 cities of India. However, the offline channel saw only average traction during the festive season”.
Commenting on the vendor’s channel expansion, Navkendar Singh, Associate Research Director with IDC India added:
“Almost all vendors have now decided to go aggressive on offline channel expansion. It will be interesting to see how they are able to match the distribution strength and retail spends by offline dominant players like Samsung, Oppo and Vivo. Considering the huge demand from smaller cities and towns, eventually, these vendors will be forced to tweak their strategies to reach out to the customers in these markets”.
Vendor Highlights
Xiaomi moved to the leadership position in major 50 cities of India, registering 120% growth in the third quarter of 2017. Redmi Note 4 alone contributed to more than 40% of the volumes and is also the highest-selling model within the top 50 cities of India. Offline expansion through ‘Preferred Partner’ programs and Mi Stores further added to this growth.
Samsung slipped to the second slot with 15% quarterly growth in the third quarter. However, it continues to dominate in the majority of cities owing to its deep penetration and reach. Galaxy J2, J7 Max, J7 Prime & J7 Nxt together make up to 50% volumes for the vendor.
Lenovo (including Motorola) remains in third position, growing steadily at 8% from the previous quarter. New Delhi, Mumbai and Bengaluru contributed around 40% of its volumes with majority sales of the K6 Power, Moto E4 Plus & K6 Note models.
Oppo moved up to the fourth position as its models F3 and F3 Plus gained momentum. Also, the newly-launched A71 is gaining positive sentiments at its sub-$200 price point.
Vivo slipped to fifth position as its sales declined marginally from the last quarter. Reduced channel spending was the primary reason for this. However, the vendor is expected to revive off the back of the newly-launched V7 Plus and Y69 in the coming quarters.
