Flipkart led a three-way contest in 2015, accounting for nearly half of all smartphones sold online in India during the calendar year, even as Amazon tripled its smartphone sales in the same period, according to Counterpoint Technology Market Research.
The year also marked the rise of Chinese vendors in India, prominent among which was Lenovo, including its Motorola unit. The Chinese accounted for close to 50 percent of all smartphones sold in India online, Counterpoint added in a press release on Thursday.
Lenovo and Motorola combined sold one in four of all the smartphones sold via ecommerce, rising to become the third-largest smartphone vendors in India. The first two were Samsung Electronics Co and Micromax Informatics.
Micromax, which lost its share overall to the Chinese, did well in specific segments, such as its Yu-branded premium phones, as demand rose in India, the second largest market for such handsets. Micromax was the top Indian vendor across segments in online sales, Counterpoint said.
That only four out of ten mobile phone users own a smartphone in the country makes India a very attractive market for hundreds of brands to enter every year and generate scale, the market research company said.
It expects competition to intensify in 2016 as Paytm, Shopclues and other online sellers aggressively promote their platforms and a greater shift towards the marketplace business model takes place, versus the inventory-led selling that helped Flipkart and Amazon in 2015.
The recent announcement from the government on the new policy which allows 100 percent foreign ownership in ecommerce marketplaces — to attract more foreign investment — will also play a role in increasing this competition.
“The new rule will ensure a level playing field with smartphone brands going for multi ecommerce platform strategy as well as with the offline retail which were at some disadvantage earlier,” Tarun Pathak, a senior analyst at Counterpoint, said in the release.
With the 25 percent cap on the sales for inventory-led ecommerce companies and “smartphones being a value-driven segment, (the rule) will have significant implications on the ecommerce sales dynamics from now on,” he said.
“Going forward, the onus will be on smartphone brands to drive promotion, sales in these marketplaces, than depend on the inventory-led ecommerce players for any significant boosters,” research analyst Pavel Naiya said in the release. This augurs well for Snapdeal and Paytm, which are more marketplace-oriented, he said.
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