IDC reveals one out of three feature-phone users in India wants to purchase a data- enabled phone in next 1 year

According to International Data Corporation (IDC)'s Smartphone Consumer PULSE research study on the mobile phone consumer trends in India, one out of three of the feature-phone users would like to buy a data-enabled phone in the next one year. With the availability of affordable mobile data, the feature-phone users are getting more aware of the different use- cases of Internet and want to experience it.

However, affordability of the mobile devices in terms of upfront purchase cost remains a strong barrier for the much-needed migration of these feature-phone users to smartphones. With the launch of 4G FeaturePhones by Jio and several other brands, the industry is trying to bridge this affordability gap by providing telco bundled value to this large feature-phone user base, with one out of two feature-phone consumers showing strong intent to buy a 4G feature phone in the next 6 months.

IDC India Smartphone PULSE is an extensive smartphone end-consumer facing research program, covering 10 major cities of India. It gives detailed insights on the purchase process helping in understanding the consumer buying habits for smartphones and feature phones in India.

It said one out of three mobile phone consumers are willing to spend more than their planned budget and more than half are ready to spend between $100 and $200 on a new smartphone. This reflects the attractiveness of this mass segment which contributes almost half of the Indian smartphone market and is dominated by brands like Xiaomi, Samsung and Motorola. The availability of consumer offers like zero-cost EMIs, easy exchange programs at both offline retail stores and online are additional incentives for customers to spend more.

Brand remains one of the major decisive factors while replacing their old smartphone, with almost 40% of the consumers of Samsung and Xiaomi staying brand loyal in their next smartphone purchase. Major replacement driver for a smartphone user is broken or lost smartphone for almost half of the respondents. This was followed by a need to get a new phone with better specifications and technology like higher RAM, better camera, more memory.

According to Himanshu Jain, Market Analyst, IDC India, "Word of mouth and recommendation by family and friends continue to be the most prominent factors influencing the smartphone consumer's purchase decision. In the tier-1 cities like Delhi, Mumbai and Bengaluru, specifications and brand value are other key drivers of choice of a brand, whereas in the tier-2 and -3 cities, apart from price, consumers also prefer design and good after-sales service."

Retailer or promoter push is the most prominent factors for choosing the brand and model selection. With 25 to 30 smartphone launches every month on an average, it gets difficult for a consumer to make a choice from the variety of options.

Almost half of the consumers check online portals for price comparisons and more than 70% consumers take recommendations from their family, friends and colleagues for brand and model choice. Even consumers buying online are visiting offline stores for touch-and-feel experience with 40% online consumers admitted visiting stores in their vicinity.

Channel Trends

According to Sachin Mehta, Market Analyst, IDC India, "The online channel is finding appeal across consumer segments by high decibel-marketing, consumer offers and multiple round of sales. Around one-third of the online purchases try to get information about prices and specifications via online blogs and reviews".

In offline channel, near-to-home convenience plays vital role in selecting channel of purchase for more than 75% consumers who buy from offline. Retailers, especially, mom-&- pop stores develop relationship who, in turn, help consumers make brand and model decisions. Retailer discounts and offers entice ~40% of the consumers.

"In offline, around half of the consumers want to pay via cash followed by zero-cost EMIs. Interestingly, three-fourths of the consumers pay via cash while buying a high-end phone above $400," adds Mehta.

However, consumers are willing to hold on to their smartphones for a longer period now, with more than 50% of the respondents having replaced their phones after 18 months or more. However, this is also an opportunity for new brands to capture the other 50% who are more prone to experimenting and replacing their devices more frequently.