The incumbent e-tailers in India have taken a deep dive in the prevalent and rising smartphone industry in the country. The ever-increasing number of internet users in India has aided the e-commerce companies to stir the conventional markets and buying behaviour of the people in India. Smartphones have emerged as the highest revenue generating category for the big e-commerce giants, Amazon India and Flipkart. And why not; Innumerable phones are seen these days that are designed and launched mostly online, while it’s difficult to get hands on them at retail stores.
The trend has attracted the eyeballs of many e-commerce players in India who have been only facilitating the sales of smartphones on behalf of smartphone vendors so far. Consequently, the e-commerce giants have, apparently, trying to capitalise on the acquired shoppers by selling their own brand instead of working for a thin margin offered by smartphone manufacturers.
Before we dig deep into it to understand their strategy and game plan, let’s have a look at the current equation of online vs offline smartphone market in India.
Smartphone Sales in India 2017: Online vs Offline
According to Counterpoint Research, the online smartphone shipments in India grew 23% annually, which is even faster than the growth of the overall smartphone market in 2017. Interestingly, the online channels contributed to more than one-third of the total smartphones sales during the year. Xiaomi, Lenovo and Samsung are the top three brands on Flipkart as well as Amazon, which accounted for 75% of the total online smartphone market in 2017.
Flipkart stole the show with a whopping 51% share of the online smartphone shipments for 2017, while Amazon captured a 33% share. But, on the bright side, Amazon emerged as the leader in India’s premium online smartphone segment with 63% share in 2017. Thanks to Apple, OnePlus and Samsung, which collectively contribute to 94% of the overall premium market segment in India. On the other hand, Flipkart captured only 31% share of the online smartphone premium segment. Though it is okay to say that Flipkart out shadowed Amazon in smartphone sales for 2017.
Flipkart And Amazon: Betting on Customers’ Data
Flipkart and Amazon India know a lot about its frequent users. These conglomerates are known to tap user data to build smartphones accordingly. They have a whole database of its customers, their search preferences, buying behaviour, and more. For instance, what the customer looks for in a device, his likes and dislikes, etc. So when Flipkart and Amazon India decided to launch there own brands of smartphones, they have a distinctly added advantage: exclusive insights into the minds of their customers.
Flipkart’s first initiative in creating its own smartphone brand came with the name “Billion“. Its first device named “Billion Capture Plus” was launched back in November 2017. The so-called made for India smartphone has been designed in India, engineered, manufactured and tested in India. Flipkart collaborated with the Indian smartphone brand Smartron to create company’s first smartphone brand. The company aggregated customer ratings and reviews and conducted intensive research to come aboard with some substantial features such as unlimited data storage on the cloud for free on secure-India based servers. Also, the phone’s response and appeal among the users will be closely tracked.
To take down Flipkart head-on, Amazon India has launched its own in-house brand “10.or” (Tenor) in January 2018. This smartphone comes with the “crafted for Amazon” label. Amazon conducted about 960 tests prior to its sale. One such test involved determining the height from which the phone can be dropped without causing any critical damage. Other tests were aimed at enhancing battery life and safety concerns. The phones are currently manufactured by two China-based companies, Longcheer and Huaqin, with the prototypes being assembled in China. Amazon said it is considering a plan to move the manufacturing to India very soon.
Apart from out of the box research techniques, the research and development teams of both the companies are adopting orthodox research methods such as focus groups and offline research to determine the actual customer requirements.
The overall smartphone sales account for more than 50% of all E-commerce in the Country. Lately, Flipkart entered the $18.4 billion smartphone market with ‘Billion Capture +’. In the wake of it, Amazon India catches up and announces its development with the private smartphone brand Tenor (10.or). Currently, two models, Tenor E and G are available in India.
Currently, 10.or is performing better as it is less expensive and offers better value for money with its specifications. The ‘Made in India’ phone, Billion Capture+ also has good specifications but it comes in the price range of INR 11k-13k, where it has to compete with more different brands. In 2018, the companies will aim their focus on hybrid strategies to push sales across online and offline channels and would employ aggressive promotion and marketing methodologies.