5G is future
According to GfK, the growth in the Indian smartphone market in 2022 is expected to be driven by a shift to higher price bands and premiumisation with 5G playing a key role.
The contribution of 5G handsets stood at 12 per cent by volume in 2021. 5G handsets volume contribution is expected to cross 40 per cent in 2022, the Business Line reported.
“Even though the Indian smartphone market ended 2021 with an overall growth in revenue, it needs to be emphasized that growth in second half of the year was significantly lower than the first half and the mode of consumer purchase also varied,” said Kartik Vasudevan, Strategic Accounts Director – India, GfK.
Vasudevan said that offline channel declined by 2.3 per cent in the second half of the year, while online grew by 28.7 per cent.
“Shifting consumer buying preferences, persistent price pressure and supply led issues for semiconductor chip are some of the key reasons for this lopsided growth,” he was quoted as saying by Buiness line.
“With 5G services expected to start sometime in near future, consumers will future proof their purchases with 5G enabled handsets,” as per GfK.
Selling price to increase
The selling price is also expected to drive up.
While the average selling price for smartphones stood at Rs 14,806 in 2021, prices for 5G handsets were 117 per cent more, the newspaper reported.
According to GfK Consumer life survey, 62 per cent of surveyed urban Indian consumers, especially the millennials and Gen Z, are looking for technology which “knows them”, “gives recommendations and takes actions on their needs.”
“It is this trend which is driving consumers to buy new smartphones which are not just faster or powerful but also easier to use and is part of their daily hustle,” the study said.
At a total market level, the average selling price of handsets has increased to 12.3 per cent in 2021 vs 2020 for both offline and online channels combined.
“Buying new tech products is one of the most important ways of pampering self for millennials and Gen Z and this will be one of the key factors to drive premiumization,” it further added.
The contribution of handsets priced over ₹30,000 in 2021 stood at 19 per cent by value against 15 per cent in 2020.
While the contribution of handsets priced over Rs 30,000 grew at a total level in both channels, within the offline market, premiumization is no longer a big city phenomena, as per GfK.
