Smartwatches have become the new favourite among young consumers thanks to increased health consciousness and a recent push from brands during online festive season sales, industry executives told ET. These devices have emerged as a ‘lifestyle asset’ for consumers aged between 18-24, who drive the majority of sales in the segment.
A report by market research firm Counterpoint on Tuesday night said ecommerce festive season sales made India the largest smartwatch market in the world by volume, surpassing the United States.
Arnav Kishore, cofounder and CEO of Fireboltt, the second-largest smartwatch brand in India, told ET it was difficult to keep up with the demand for smartwatches this festive season and that his company lost out at least 40% more sales because of this.
“This festive season was record-breaking and one of the factors is that prices have come down,” he said. “The number of brands is increasing and the product offering is increasing.”
Noise and Boat are the other two key firms in the segment that are expanding aggressively. Noise CEO Gaurav Khatri said his firm saw growth of over 200% and sold more than two million smartwatches this festive season.
He said smartwatches are gaining popularity because they serve two purposes — a fitness companion and a lifestyle asset. Adoption accelerated after features like SPO2 (oxygen measurement tool) became popular during the pandemic, he added.
The main drivers of the record sales in Q3, apart from festive season sales, were bigger product portfolios at affordable prices, and an emphasis on local manufacturing, according to the research firm. The Indian smartwatch market grew 171% year-on-year in the third quarter, it said.
“During Diwali and Rakshabandhan many people considered smartwatches as a gifting option and companies also started considering smartwatches as corporate gifts. Brands also launched multiple products and priced them aggressively during the festive season and products were even being sold at Rs 999,” Anshika Jain, a senior analyst of Counterpoint, told ET.
Sales of smartwatches have largely been driven by online channels as most buyers are young.
“During the January-October period this year, the demand for smart wearables has grown by over two-fold on our platform as against the same period last year, with tier-2 cities and beyond constituting over 60% of the overall demand,” a Flipkart spokesperson told ET.
“We have been utilising various innovative channels such as video catalogues, buying guides, video commerce, and influencer marketing to further engage and inform our customers about the various new products available in this segment,” the Flipkart spokesperson said.
“These consumers are young and belong in the online-driven age group. The low price point enables online sales,” said Jain of Counterpoint. “The offline space is dominated by premium players like Samsung and Apple and these devices warrant ‘feel and touch’.”
Indian brands dominate
The top Indian smartwatch brands — Noise, Fire-Boltt and Boat — have a combined market share of 66%, the report said. Jain attributes Indian companies’ dominance to their attractive pricing, product portfolios and refresh of existing models.
During the third quarter, the top three brands had more than 90 models each, up from around 75 in the second quarter.
“It shows how frequently Indian players are upgrading their portfolios and tweaking them according to customer requirements. Indian players have been quite good at product refresh. That is why they are doing well,” said Jain.
Chinese brands like Xiaomi and OnePlus products are priced above Rs 5,000 and some of them lack features such as Bluetooth calling, whereas Indian brands have added features like bigger Amoled displays that are typically found in high-end products like the Apple Watch.
Competition in the space is heated. Noise has a mere 1% lead Fireboltt, and Boat recently raised $60 million from Warburg and Malabar Investments through convertible preferred stock notes. It is expected to use this money to build its wearables brand.