Smartphone market drops by 30.5% in top 50 cities of India, after a bumper festive season in Oct: IDC India

According to International Data Corporation’s (IDC) Monthly City Level Smartphone tracker, smartphone sales within the leading 50 cities of India fell by a whopping 30.5 percent month on month in Nov 2016 over Oct 2016.This downward trend can be attributed to demonetisationand resulting cash crunch along with the cyclically lean period after festive season in Oct.

According to Upasana Joshi, Senior Market Analyst, IDC India, “Demonetisation has impacted the smartphone market at almost all levels including the customer demand and stock movement in the distribution channels.The slowdown wasseen across all city tiers, with a de growth of 31.7 percent in Tier 1 cities and 29.5 percent in Tier 2,3& 4 cities in Nov 2016 over Oct 2016.There was a huge drop in inquiries and significantly reduced footfall at the retail. To counter this, mobile phone retailers together with micro finance companies started offering zero down payment options to stir sales”

“Interestingly, the premium smartphone segment saw some growth during the weeks following demonetisation, wherein consumerswereseen rushing to buy higher priced smartphones using the demonetised currency, with reports of these high priced models being sold at a premium. “adds Joshi.

India based vendors were hit the most due to demonetisation, with a drop of 37.2 percent in Nov 2016 across Top 50 Cities of India as compared to China based vendorswith 26.5 percent drop and Global vendors with 30.5 percent drop over previous month.

Varun Singh, Market Analyst, IDC India says “In the offline channel, while the Indian vendors were struggling, the Chinese vendors like Oppo & Vivo pulled in strong demand largely due to their strong hold on distribution and better partner incentive schemes and promotional activities during the slowdown.,”

“However, IDC expects the impact of demonetisation to be transitory with the market expected to bounce back to normal levels by Feb 2017. adds Singh.

Navkendar Singh, Senior Research Manager, IDC India says “The demonetisation came on the heels of a hit festival season in Oct, during which the smartphone industry is expected to have sold around a third of entire years’ volume. Cash purchases make up a significant portion of these purchases in both online and offline channels, hence the impact seen was immediate and more in below $200 price range which still makes up a large portion of the market.”