Small Town Customers Fuel Amazon India’s Smartphone Biz

SUMMARY

Mid-premium smartphones in the INR 20,000-30,000 and INR 30,000-Rs 50,000 segment saw over 50% year-on-year growth

Customers in Tier 2 and 3 cities accounted for 70% of smartphone purchases on Amazon India

5G enabled smartphones are also seeing an uptick in demand on Amazon India

As Indian consumers have started adopting more premium phones, Amazon India’s smartphone business has seen double-digit growth in 2021. Thanks to small-town buyers opting for smartphones priced above INR 20,000, the smartphone segment of the ecommerce giant grew 30% in 2021.

Moreover, mid-premium smartphones in the INR 20,000-30,000 and INR 30,000-INR 50,000 segment saw over 50% year-on-year growth. This trend reflects the changing consumer need for high-performance smartphones, accelerated by the pandemic.

Customers are gradually moving to smartphones which are suitable for multi-tasking, including work, entertainment, and other common uses, Nishant Sardana, category leader, smartphones and accessories of Amazon India, told ET in an interview. Hence, they are choosing smartphones with a better processor and larger RAM.

According to a Counterpoint report, the high growth in the upper-tier and premium segments increased the market retail average selling price (ASP) in the Indian smartphone market in Q1 2022. The report added that smartphones above INR 15,000 price band have registered double-digit growth.

Further, the INR 5000-10,000 price ranged smartphone users now want their experiences to go beyond just consuming over-the-top (OTT) content or playing games.

Interestingly, customers in Tier 2 and 3 cities accounted for 70% of smartphone purchases on Amazon India. Besides, customers from Tier 2 cities purchased three out of four smartphones sold on the platform.

“That’s where we are seeing the premium above INR 20,000 with 5G support doing very well,” Sardana said.

As a result, 5G enabled smartphones are also seeing an uptick in demand on Amazon India. Considerably, the ecommerce platform has introduced a special section for 5G smartphones.

5G smartphone shipments grew 314% year-on-year, accounting for more than 28% of the total smartphone shipments in the quarter, the counterpoint report added. The report predicts 5G smartphone share to reach 40% by the end of 2022.

However, India’s overall mobile handset market declined 16% year-on-year in Q1 2022 due to supply issues, high inventory levels and softening of consumer demand.