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Weekend story | Festive cheer: Smartphone industry to see record sales despite component shortage

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High pent-up demand backed by aggressive promotions in the mid and premium segments

Despite the challenge of component shortage, this festive season promises to be a happy one for the Indian smartphone industry, which is expected to witness record sales driven by high pent-up demand, particularly in the mid and premium segments.

According to research firm Counterpoint, about $7.6-billion worth of smartphones will be sold during the ongoing festive season that kicked off during the first week of October when online platform giants Amazon and Flipkart announced their annual sales and will end on November 4 with Deepavali.

Sales contribution

Likewise, Techarc and mScanIt forecast that the Indian smartphone industry is expected to earn more than half of its sales during the festive quarter. With approximately 49.9 million smartphones worth $16.9 billion projected to be sold during the October-December 2021 quarter, the sales contribution by revenue and volume is estimated to be 56% and 32%, respectively, it said.

“The season has been driving smartphone sales due to high consumer demand during Dasara and Deepavali. This trend has been accelerated this year by the high pent-up demand backed by aggressive promotions in the mid and premium segments,” Senior Analyst at Counterpoint Prachir Singh said.

As per Techarc and mScanIt survey, the mid-segment (₹12,000-15,000) and premium range (₹25,000-50,000) smartphones would lead in sales, contributing 42% and 51.7%, respectively, to overall handset sales.

According to the report released by RedSeer Consulting, the first week of online festive sales saw 23% year-on-year growth with goods worth ₹4.6 billion (₹32,000 crore) sold from brands and sellers. One of the factors driving the growth was sales of mobile phones. As per RedSeer estimates, mobiles worth ₹68 crore were purchased every hour across all platforms during the first week of festive sales.

Smartphone brand Xiaomi has earlier announced that it sold over 2 million smartphones in five days of the festive sale across channels, while rival realme said it had sold more than a million smartphones just in the first three days.

Counterpoint Research Director Tarun Pathak said the smartphone retail average selling price (ASP) will grow 14% to reach its highest ever at $230. “The overall consumer sentiment has been positive. Many consumers have decided to spend from their accumulated savings for something that is more personal. This trend will drive a faster smartphone upgrade.”

Higher trade-ins

He said the season is also seeing higher trade-ins and aggressive EMIs that increase device affordability and help consumers bypass multiple price barriers. This has helped drive the sales of mid-to-high tier smartphone models and, subsequently, the overall ASP.

“The relatively higher sales of premium segment smartphones also helped offset the losses in the mass market due to price hike,” Mr Pathak said.



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