Word of mouth key to Indian smartphone sales

The most important factors influencing the sale of smartphones in India are point of sales (POS) techniques and word of mouth, according to research from IDC.

The research firm’s new Smartphone PULSE (Indian smartphone end consumer research) study finds that 75% of Indian consumers take recommendations from family and friends.

When it comes to smartphone purchases, 50% of buyers are under 25 years and two-thirds of consumers prefer making the purchase at a brick-and-mortar store where they can touch and feel the device. Also 40% of consumers depend on in-shop promoters and retailers to decide their preference for a brand.

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.”

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.

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.

e-Commerce is a growing trend in India with 50% of online consumer preferring e-commerce due to the convenience and ease of comparing different smartphone models.

“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,” IDC India market analyst Sachin Mehta said.

“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.”

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% 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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