Tier II and III cities accounted for a higher share of the country's smartphone shipments in the first quarter of 2016, helped by devices from Chinese vendors gaining traction, research firm has IDC said.
Tier II and III cities accounted for a higher share of the country’s smartphone shipments in the first quarter of 2016, helped by devices from Chinese vendors gaining traction, research firm has IDC said.
Tier I cities like Delhi, Mumbai, Chennai, Bengaluru and Kolkata accounted for 26.4 per cent of the total shipments of country’s smartphone market in January-March, down from 29.9 per cent in October-December 2015 quarter, IDC said in a report.
This clearly indicates the smartphone market is gradually deepening towards tier II and tier III cities, it added.
“As Tier 1 markets saturate, the next growth frontiers for smartphone players are clearly the smaller cities and towns. China based vendors have understood this trend and are gradually building and investing significantly in the offline distribution network in tier II cities and beyond,” IDC India Senior Research Manager Navkendar Singh said.
This really shows the offline channel remains significant and the vendors have understood that offline must go hand in hand with the online channel, he added.
China-based vendors have already captured more than 20 per cent of the smartphone market in 25 tier II and III cities of India and are expected to penetrate further as their offline presence increases.
“Majority of the sales for the China based vendors like Lenovo, Motorola, Xiaomi, LeEco are still coming from the online channel in these cities due to their superior positioning as quality brands, with a value for money proposition,” Singh said.
Others like Oppo and Vivo are expected to grow in the coming months in these markets with their huge marketing spends and increasing retail presence, he added.
Customers are choosing more 4G devices over 3G ones with more than 65 per cent of the smartphones being 4G compatible across all city tiers, IDC said.
Samsung dominated the market space amongst top 30 cities, with 29.7 per cent share followed by Micromax (13.1 per cent), Lenovo (including Motorola — 12.1 per cent), Intex (9.3 per cent), Lava (6.7 per cent), Xiaomi (4.9 per cent) and Apple (3.5 per cent).