India’s smartphone market sales volumes hit a plateau as consumers upgrading to costlier phones that they can hold for upto 3 years, says Xiaomi India Business News & Hub

India’s smartphone market has hit a plateau as it experiencing a shift from volume to value game as consumers are now increasingly upgrading to better devices which they can use for upto three years, observed Sandeep Sarma of Xiaomi India.

“Earlier in 2017, the average retention time or an average cycle of using a phone was nine months in India, which is very short, but it mostly was due to huge leaps in terms of technology at that time,’’ Mr. Sarma, Associate Director, Marketing, Xiaomi India told The Hindu.

But right now, he said, people were using phones for two, two-and-a-half to three years. So, when they are upgrading, they know they need to use it for so long, so they buy a better phone, he stated.

According to him, the “miscalculation” (about the smartphone market) that most people in the industry, including Xiaomi, had in 2022 was because during the pandemic in 2020 and 2021 saw unprecedented demand for smartphones as everyone was stuck in their homes.

Those two years were a sort of an outlier and everyone thought that smartphones sales would keep going up, but it wasn’t’ a realistic expectation, Mr. Sarma explained.

“When you look at the overall market itself, the smartphone market is not really growing much, maybe slightly, maybe de-growing in certain quarters as well. This is also because consumers are using the phone for a longer time now,’’ Mr. Sarma elaborated.

Commenting on consumer trends, he said, a lot of people are sort of premiumising their choices, this trend is more evident in towns and villages. “By that, what I mean is, they are going up a level or even two in terms of their smartphone upgrades. So, someone who has probably bought maybe a phone worth ₹10,000 a couple of years back, is probably, instead of going for the next obvious choice which is a smartphone maybe in the 20K segment, they’re jumping all the way to 30k or 35k.’’

Affordability was also improving. Plus, no cost EMI plans, ranging from one year to even three years in certain cases, were allowing customers to go for phones that they previously could not afford, but currently have access to. “So all of these means that people are holding their phones for longer hence the number of smartphones sold sort of falls but the value has been increasing’’ he explained.

On traction witnessed in rural markets, he said, it was far more common to see people becoming more affluent and upgrading phones. “Earlier affluence and affordability was something that was restricted to cities perhaps but now it’s going into, you know, to tier two, tier three, tier four even,’’ Mr. Sarma commented.