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E-commerce major Amazon’s sales of premium smartphone devices in 2023 jumped 40 per cent year-on-year (Y-o-Y) -- one of its highest growth rates in India.
Buyers were mostly from Tier-II cities, said a senior executive of Amazon.
“While per unit growth has been flat, we have grown in value more than in previous years. This is driven entirely by premium devices -- above Rs 30,000,” Ranjit Babu, director, wireless and TV, Amazon India, told Business Standard.
According to Babu, premium smartphone sales are primarily being fuelled by better financing options such as no-cost and low-cost equated monthly instalments (EMIs).
“As much as 40 per cent of devices sold on Amazon last year were purchased through EMIs, especially during the fourth quarter (of CY 2023) amid festival season sales,” he said.
The company witnessed its highest ever average selling price during last year’s festival season, Babu added.
India’s domestic smartphone market grew by a nominal 1 per cent in calendar year 2023 due to consumer demand remaining stressed, according to the data from International Data Corporation (IDC).
Notably, sales of high-end devices are not limited to Tier-I cities. Consumers in Tier-II cities and beyond are driving most of the sales for premium smartphones.
“Tier-II cities account for more than 70 per cent of our sales. Since our growth is being fuelled by the premium category, it means that premium devices are no longer limited to the top 10 cities in India,” Babu said.
Factors such as ease of availability, the speed of delivery, wider selections, and easier financing options are enabling growth in these markets.
The rapidly increasing demand for 5G devices too is a factor.
“Over 70 per cent of what we sold last year, by units, was 5G. This year we expect pricing to continue to go down on 5G. In fact, 5G is going to be the biggest driver of adoption below Rs 30,000,” Babu said.
According to the IDC data, 79 million 5G smartphones were shipped in 2023, with launches in the mass budget segment. The average sale price of 5G phones dropped to $374, a decline of 5 per cent Y-o-Y in 2023. Within the 5G smartphone shipments, the share of the budget segment ($100-200) increased to 35 per cent from 22 per cent a year ago.
