Feature phone users plan to purchase data-enabled phone in next 1 year: IDC

With the availability of affordable mobile data, feature phone users in India are better aware of the different uses of the internet, which they want to experience.

Now, one out of every three feature phone users in India expects to be able to buy a data-enabled phone in the next one year, according to International Data Corporation (IDC)'s Smartphone Consumer PULSE research study on mobile phone consumer trends in India.

IDC India Smartphone PULSE is a smartphone end consumer research program covering 10 major cities in India.

According to the research, affordability of the mobile devices in terms of upfront purchase costs remains a strong barrier to the much-needed migration of these feature phone users to smartphones.

With the launch of 4G feature phones by Jio and several others, the industry is trying to bridge the affordability gap by providing telco-bundled value to the large feature phone user base, with one out of two consumers showing strong intent in buying a 4G feature phone in the next six months.

"Word of mouth and recommendation by family and friends continue to be the most prominent factors influencing the smartphone consumer's purchase decision. In tier-I cities such as Delhi, Mumbai and Bengaluru, specifications and brand value are other key drivers of choice of a brand, whereas in tier-II and III cities, apart from price, consumers also prefer design and good after sales service," said Himanshu Jain, market analyst at IDC India.

One out of every three mobile phone consumers are willing to spend more than their planned budget and more than half are ready to spend between $100 to $200 on a new smartphone.

This reflects the attractiveness of this mass segment which contributes almost half of the India smartphone market, which is dominated by brands such as Xiaomi, Samsung and Motorola. The availability of consumer offers like zero-cost equated monthly installments, easy exchange programmes at both offline retail stores and online are additional incentives for customers to spend more.

Brand remains one of the major decision factors while replacing their old smartphone, with almost 40 per cent of the consumers of Samsung and Xiaomi staying brand loyal in their next smartphone purchase.

Major replacement driver for a smartphone user is broken or lost smartphone for almost half of the respondents. This was followed by the need to get a new phone with better specifications and technology like higher RAM, better camera, more memory.

Retailer or promoter push is the most prominent factors for choosing the brand and model selection. With 25-30 smartphone launches every month on an average, it gets difficult for a consumer to make a choice from the variety of options.

Almost half of the consumers check online portals for price comparisons and more than 70 per cent consumers take recommendations from their family, friends and colleagues for brand and model choice. Even consumers buying online first visit offline stores to get a sense of touch and feel of the handsets. 40 per cent online consumers admitted visiting stores in their vicinity.

Channel trends
"The online channel is finding appeal across consumer segments by high decibel marketing, consumer offers and multiple round of sales. Around one third of the online purchases try to get information about prices and specifications via online blogs and reviews,'' said Sachin Mehta, market analyst, IDC India.

In offline channels, near to home convenience plays a vital role in selecting point of purchase for more than 75 per cent consumers who buy offline. Retailers, especially, smaller stores develop relationships, which in turn helps consumers make brand and model decisions. Retailer discounts and offers entice ~40 per cent of the consumers.

However, consumers are willing to hold on to their smartphones for a longer period now, with more than 50 per cent of the respondents having replaced their phones after 18 months or more. However, this is also an opportunity for new brands to capture the other 50 per cent who are more prone to experimenting and replacing their devices more frequently.