India's Mobile Phone And Accessories Market Set To Boom This year the industry is expected to thrive further and is projected to see 190-200 million shipments in 2022 alone with 5G looming on the horizon

It's no secret that the Indian mobile industry had a few speed bumps on component supply crunch owing to the pandemic and global shortage of chipsets. Consumer spending on mobiles took a hit too. However 2021 onwards, the resilient sector has seen a comeback of sorts. The boom is being driven by consumers upgrading to better devices and increased demand for personal devices in homes as offices, schools, colleges and entertainment all shifted to people's homes.

This year the industry is expected to thrive further and is projected to see 190-200 million shipments in 2022 alone with 5G looming on the horizon. With a substantial jump in the average selling price (ASP) of mobiles and higher volumes, the smartphone market revenue in India crossed $38 billion (27 per cent y-o-y growth) in 2021. The feature phone segment however saw flat sales. Retail ASP of smartphones in the country grew over 14 per cent y-o-y in 2021 to reach its highest ever at $227 or INR 17,000 approximately. However, owing to global semi-conductor shortage, in the last two quarters of 2021, the supply was outstripped by demand. Q4 2021, saw an 8 per cent decline y-o-y but the situation is expected to get better by the end of Q1 2022.

The government approved a INR 76,000 crore ($10.2 billion) initiative in December 2021, to expand semiconductor and display manufacturing in India, establish the country as a worldwide hub for hi-tech production and attract large chip companies. The initiative will push India to achieve its goal of becoming self-reliant in electronics manufacturing by attracting significant investments and creating 35,000 specialised jobs, in addition to 100,000 indirect jobs. Local manufacturing has also bounced back, contributing 98 per cent of shipments in 2021 compared with 90 per cent in 2020. The PLI scheme is a welcome move for the Indian mobile manufacturing ecosystem, attracting top players like Apple and Samsung to increase their Make in India footprint and make India their export hub. Another point to be noted is that handset exports in the country also saw a 26 per cent y-o-y increase in 2021. According to the Software Technology Parks of India (STPI), Telangana, Maharashtra and Uttarakhand have submitted three new proposals for setting up electronics clusters under the modified scheme for consideration by the ministry of electronics and information technology (MeitY). All of these initiatives and factors, when looked at cumulatively, have pushed the market up and are expected to keep driving further growth.

At the helm of this boom and high demand are decreasing prices of smartphones. Top-of-the-line value chain assemblies like the Foxconn plant are being set up in the country to assemble premium smartphones from the likes of Apple, Xiaomi and Nokia. All these factors translate to reduced smartphone prices, as a result of which, more and more consumers are opting to buy smartphones, slowly phasing out "dumb' feature phones. While feature phones will continue to be around, India's growing digital transformation and the digital economy has provided the requisite impetus for consumers to upgrade to smartphones. Even consumers at the bottom of the pyramid are seeking affordable and accessible smartphones that deliver on voice, vernacular, and video. Smartphone brands that can bring unique, affordable, and data-bundled propositions like the JioPhone Next, will stand to gain in this race to win users at the bottom of the pyramid.

Another segment that will almost certainly piggyback off the smartphone boom is mobile accessories. The major mobile accessories used by customers include powerbanks, USB cables, mobile cases and covers, chargers and earphones. Owing to substantial growth in adoption of smartphones and tablets, the mobile accessories market in India is expected to reach INR 25,280 crore by 2023. It was a fairly unorganised segment but now change is afoot. Large brands like Boat, Pebble and Spigen, which only used to import and assemble in-country are now starting to manufacture in India. For example, currently around 10 per cent of Boat's products were manufactured in India and the rest was churned out in Vietnam and China. Now, Boat's target is to manufacture close to 40 per cent of its production volume in the home market by 2024 and is hoping to make the most out of the government's proposed PLI (Product Linked Incentive) scheme for wearable makers.

With both markets primed and ready to boom, mobile and accessory brands will need to drastically expand their reach amongst the masses to capitalise on this gold rush. Deep retail and distribution through B2B e-commerce platforms will be vital, coupled with the ability to rapidly expand their network of trusted distributors and retailers in Tier II, III, and IV cities across the country. This is where B2B e-commerce marketplaces such as Solv can play a huge role by facilitating commerce and weeding out bottlenecks in the supply chain.