india smartphone market: witnessing exponential growth

17
WORKING SESSION: RECRUITMENT BEST PRACTICES MAY 2014 India Smartphone Market: Witnessing Exponential Growth March 2015

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WORKING SESSION:RECRUITMENT BEST PRACTICES

MAY 2014

India Smartphone Market:

Witnessing Exponential

GrowthMarch 2015

India at the Cusp of Digitization

Vendor Overview

Smartphone Usage Trends / Use Cases

Agenda

1

Smartphone Adoption in India

3

India is at the cusp of digitization, driven by mobility

254 MnTotal Internet

Users

2014 2019

Total Social

Media Users

Total Data

Traffic

121 Mn 262 Mn 17%

997 PB 4,081 PB

9% (88 PB)

Expected to grow

by 67%

33%

631 Mn

>90% (234 Mn)

>80% (>100 Mn)

20%

CAGR

Footprints of Digital India: Mobile Emerges as a Pervasive Driver

Source: TRAI, Cisco, Statista, Business Today, Zinnov Analysis

%age represent: Mobile users as a percent of Total Users

India at the Cusp of Digitization

Vendor Overview

Smartphone Usage Trends / Use Cases

Agenda

Smartphone Adoption in India 2

5

Multiple factors are propelling the smartphone adoption at an exponential pace in India

Immense

Competition leading

to Price Reductions

Ease of

Access of

Content &

Language

Localization

Government

Incentives

through its

“Make in India”

Prevalence of

Internet-enabled

Services on

Smartphones

1

4

2

3

>100 # of mobile brands in India

<$35 Smartphone launched by

Intex (Intex Cloud FX)

~65% Facebook users access

content via smartphones

Spice & Google launched India’s first

Android One Hindi smartphone

>90% Internet access facilitated

through mobile

>100%Growth in online purchases

through mobile in last 2 yrs

~80MnInvestment by LAVA for

its own manufacturing unit

in India

Source: Business Insider; LiveMint; Medianama; Indian Express; NDTV Gadgets; Mobility India; Zinnov Analysis

Drivers of Smartphone Adoption

6

Smartphones, already outpacing the feature phones’ growth, are expected to show a massive 36% CAGR over the next 5 years

Source: IDC; Avendus Estimates; Cisco; Zinnov Analysis IDC calculates sales of mobile handsets by tracking the number of handsets that leave the factory premises for OEM sales or stocking by

distributors and retailers. For imported handsets it’s the number of handsets that leaves the first warehouse to OEMs, distributors and retailers.

Smartphone vs Feature

Phone Shipment

23.3 22.514.9 18.417.1

~81 Mn Smartphone Shipped in 2014

51%

-21%

QoQ

Growth

Smartphones

Shipped (Mn)

78%72% 71% 68% 65%

22%28% 29% 32% 35%

Q4, ‘13 Q1, ‘14 Q2, ‘14 Q3, ‘14 Q4, ‘14

Smartphone

Feature

Phone

20142012 2013 2019P

651

140

6729

Smartphone Users in

India (Mn)

36%CAGR

7

Smartphone Usage: Urban (by Time Spent in Activities)

BrowsingOffline

Activities

Calls &

MessagesOnline Apps

Large Metros (Population: 40l+)

Mini Metros (Population: 10-40l)

Tier-I & Tier-II(Population: 5-10l)

18%

23%

27%

31%

29%

23%

18%

16%

15%

33%

33%

35%

Source: UNSTOPPABLE ! SMARTPHONE SURGE IN INDIA CONTINUES – Nielson (2014); IMRB’s Mobile Internet India 2014 report; Zinnov Analysis

Note: Nielsen report data is for 2013; 1Urban-Rural Split for Smarphone users has been assumed ot be same as that of Mobile Internet Users

Urban Regions lead

Smartphone Adoption in India

Smartphone users in Mini Metros and Tier-I/II cities match their

Large Metro counterparts w.r.t. usage of Online Apps and Browsing

Smartphone users in Mini Metros and Tier-I / II cities show an evolved usage of smartphone, similar to Large Metros

29%

4%

Urban1

Rural1

Base: 905 Mn

Base: 409 Mn

India at the Cusp of Digitization

Vendor Overview

Smartphone Usage Trends / Use Cases

Agenda

Smartphone Adoption in India

3

9

Home grown vendors though commanding a major share, are facing a stiff

competition from Chinese vendors

Samsung 22%

Micromax 18%

Intex 8%

Lava 7%

Xiaomi 4%

Others 41%

Smartphone Shipment by

Vendors, Q4’14

41%

Chinese

Vendors

35%

24%

Indian

VendorsMNC

Vendors

Smartphone Sales by

Brands

• Chinese brands are gaining prominence

• Recently, Xiaomi surpassed all other

brands in sale of 4G LTE smartphones

Source: Dazeinfo, IDC, Nextbigwhat, Zinnov Analysis

Micromax is threatening the dominance of

Samsung

Android

84%

Windows 8%

Blackberry

3%3%

2%

Symbian

iOS

Smartphone User Base by

Operating Systems

Availability of free apps is one of the

reasons for using Android over others

10

Smartphone vendors are adopting new and innovating GTM strategies in order

to gain traction in the highly competitive Indian market

Online

Exclusive1

Experience

Centres2

Brick & Mortar

Model3

OS: Not much in

vendor’s controlHardware

Differentiation4

Source: Multiple, refer speaker notes

Reduction in cost No physical distribution, no

seller margin

New brands opting this model

$50-$80

100 # of experience centres

planned by Xiaomi in India

250# of retail stores planned by

Gionee in India

HW: Vendor can add

HW specs

Selfie-centric

smartphone

cameras

Smartphones with

Octa-core and 64-

bit processors

Vendors are pushing retail

expansion

Vendors opening experience store

to facilitate customer experience

Vendors’ Go-To-Market Strategies

India at the Cusp of Digitization

Agenda

Smartphone Adoption in India

4 Smartphone Usage Trends / Use Cases

Vendor Overview

12

Users are spending significant time on their smartphones

Time Indians spend

using apps on their

Smartphones>1 Hr/day

Frequency at which

25% users check

their smartphones

>100

times/day

Time Indians spend on

their Smartphones>3 Hrs/day

87%Entertainment

78%Communication

59%Stay Informed

Usage Trends Smartphones Emerging as Multi-

Activity Portal*

(20% increase in 2 years)

(63% increase in 2 years)

Source: Ericsson ConsumerLab, Performance shapes smartphone behavior, India, 2014; Our Mobile Planet: India – Understanding the Mobile Consumer (Google, 2013)*Note: Google data is for 2013

13

Smartphone users prefer messaging / chat apps for communication

95%of users access

chat apps multiple

times per day

The power users and early

adopters of messaging apps

are under 3521%

users made an

In-app purchase

while using a

mobile messaging

/chat app

Source: Inmobi Insights – Mobile Messaging Apps in India

DIGITAL GOODS (STICKERS, GAMES, ETC )

UPGRADED APP WITH EXTRA FEATURES

UPGRADED APP WITHOUT ADS

PHYSICAL GOODS PURCHASES

Communication App Usage In-App Purchase Behaviour

Launched a dedicated helpline

powered by WhatsApp

Customer Support

PromotionPromotion via WhatsApp

15% sales though WhatsApp

Business Use Cases

Social Networking

19%

Voice Calls

17%

E-mails

10%

SMS/MMS

10%Messaging / Chat Apps

44%

Preferred Mobile Communication Modes

15%

27%

35%

38%

14

Consumption of video becoming a prime mobile use case

Popular Video Consumption Mechanisms

Videos shared

through Chat

Aps

Videos Shared

over Social

Media

Streaming

Video Over

Apps

Downloaded

Video Clips

Stream via

Webpages

31%23% 22%

15%

9%

40%Late Night in

Bed

25%While

Commuting

23%While Having

Dinner

20%While

Shopping

Preferred Time for Video Consumption

Source: Ericsson ConsumerLab, Performance shapes smartphone behavior, India, 2014

75 Channels

Available on all platforms

1/3 viewers access

videos on mobiles

Video Goes Mobile

hotstar live TV movies

cricket - App

>10Mn app downloads

15

Smartphone is changing the way consumers shop

Smartphones helps user Research

Product Anytime, Anywhere

63%At Home

20%On the go

19%In store

91% have researched

a product or service on

their phone

Research that starts on Smartphones

leads to Purchase Across channels

66% then

purchased via

computer

53% then

purchased

it offline

Smartphones are an Emerging

point of purchase

Source: Our Mobile Plant: India – Understanding the Mobile Consumer (Google, 2013)

Note: Google data is for 2013

54% have

purchased a product

or services on their

smartphone90% traffic & 80% sales

coming from mobile

16

To address the demand from Tier 2/3 cities and changing consumer shopping pattern, ecommerce companies are increasing their focus on mobile commerce

8%

More Business Coming From

Tier2/Tie3 Cities

Proportion of

ecommerce’s

addressable market in

top 8 cities

30% -50%Rise in ecommerce

transactions in Tier 2

and Tier 3 cities

Companies Focusing on

Enhancing Mobile Products

Rise of Mobile Only & Mobile

Focused Companies

>50%

70%

Plans: Mobile only venture in a

couple of years

Plans: Largely a mcommerce

business in 2-3 yearsA food ordering start-

up founded in 2013

A mobile wallet

company

100Mn# of mobile wallets by year

end form the current

>25Mn mark

business from

mobile

business from

mobile

3# of rounds of funding

received

Changing Consumer Shopping

Behaviour*

~55%$2 Bn2014

$19 Bn2019

Size of mcommerce Market

91%91% have researched a

product or service on

their phone

Factors Prompting ecommerce

Companies to Focus on Mobile

Commerce

A

B

Source: Economic Time; Business Standard; Huffington Post; Our Mobile Plant: India – Understanding the Mobile Consumer (Google, 2013);

Zinnov Analysis *Note: Google data is for 2013

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