Affordability, Aspiration and Access driving the market growth of smartwatches in the country
According to a Counterpoint report of August 2022, with a 300% YoY growth, India became the second-largest smartwatch market by overtaking China. This is not a mere statistic but a fact that speaks about the potential of the ever-expanding smartwatch market size in India. This has not only attracted established brands but also new emerging brands to foray into this segment. The growth of this industry has been driven by various factors such as increasing disposable income, lifestyle changes, and technological advancements. With the increasing popularity of wearable devices and the need for fitness tracking, smartwatches have become a preferred choice among consumers in India. In this article, we will explore the meteoric rise of smartwatches in the Indian market, the factors driving this growth, and the future outlook.
Factors Driving the Growth of Smartwatches in India
The Indian smart wearables market has been growing at a rapid pace in recent years. According to a report by Mordor Intelligence, the India smart wearables market is expected to register a CAGR of 23.91% over the forecast period of 2022–2027. A major factor driving the growth of the smartwatch market is the increasing penetration of smartphones in the country. Today, India is the second-largest smartphone market in the world, with over 750 million smartphone users. This has led to a rise in demand for smart wearables and mobile accessories that can seamlessly connect with smartphones and enhance their functionalities. Smartwatches with their varied features of fitness tracking, communication, health monitoring, etc. have become a value add-on device to smartphones, not only in terms of functionalities but also for aspirational value and lifestyle statements.
Another factor that is contributing to the growth of the smartwatch market in India is the increasing awareness of health and fitness. The COVID-19 pandemic has led to a surge in demand for health and fitness-related products, including smartwatches. There was a time when smartwatches were initially considered a luxury item and were pursued by serious fitness enthusiasts. However, post-pandemic fitness awareness and lifestyle changes such as the need for health monitoring and the ability to stay connected on the go have led to the growth of the smartwatch industry in India. With an increasing focus on health and wellness, consumers are looking for devices that can track their daily activities, monitor their heart rate, and provide insights into their overall health. Smartwatches have become the go-to device for consumers looking for a comprehensive fitness-tracking solution.
Another important factor in the growth of smartwatches in India is their increasing affordability. With the launch of budget-friendly smartwatches by home-grown brands such as Noise, boAt and Fire-Boltt, more people are now able to afford smartwatches. These budget-friendly smartwatches offer many features found in premium models, such as fitness tracking, GPS, Bluetooth calling, metal casing and a big display.
Another factor behind the growth of smartwatches in India is their increasing popularity among millennials. Millennials are a tech-savvy generation that values convenience and the latest technology. Smartwatches offer them the convenience of having all their notifications and health data in one place, while also allowing them to express their style and mood with customizable watch faces and straps.
The Market Segment Divide
The Indian smartwatch market is witnessing significant growth in all segments, but the budget and mid-range segments are seeing the most growth. There is a big divide between the budget and premium segments, and that is in terms of volume over revenue. The budget segment is largely driven by volume sales considering the vast market size, while the premium segment is seeing steady growth in revenue capitalization.
The budget segment is driven by the increasing demand for affordable smartwatches with basic features such as fitness tracking and messaging. The mid-range segment is seeing growth due to the increasing demand for smartwatches with advanced features such as mobile payment and health monitoring. The target audience for budget smartwatches is entry-level users who are looking for basic features such as fitness tracking, messaging, and music control. The mid-range segment targets consumers who are looking for more advanced features such as mobile payment and health monitoring.
The premium segment smartwatches feature a high-level OS that allows users to install third-party apps. The premium segment is also growing, but at a slower rate than the budget and mid-range segments. This is because the premium segment is limited to a smaller market of consumers who are willing to pay a premium for advanced features and high-accurate sensors for health and fitness monitoring, as well as those who prioritize style and brand image. This segment is primarily targeted towards working professionals and fitness enthusiasts who are willing to invest in high-quality and feature-rich smartwatches.
Apple, Samsung and Huawei are the top 3 smartwatch selling brands globally, according to a report by Counterpoint in February 2023. The same report further states that Indian brands such as Noise and Fire Boltt found spots in the global top 5 sellers’ list thanks to the rapid growth of their domestic market. In the Indian market context, it is local brands such as Noise, Fire-Boltt, and boAt have a larger share of the pie from the volume aspect. Whereas, multinational brands such as Apple, Samsung, Fossil, Fitbit and Garmin dominate the premium segment of smartwatches.
“Make-in-India” Factor
The Indian government’s “Make in India” initiative has helped the Indian smartwatch industry to manufacture domestically and reduce its dependence on Chinese imports. This initiative was launched in 2014 to promote domestic manufacturing and make India a global manufacturing hub. Several Indian companies such as Titan and Noise have started manufacturing smartwatches in India, which has led to the growth of the domestic industry. The government has also announced several incentives for companies that manufacture in India, such as reduced customs duty, tax exemptions, and subsidies. This initiative has also helped in reducing India’s dependence on Chinese imports, which was a significant concern for the industry due to supply-chain issues.
One of the major benefits of the Make in India initiative for the Indian smart wearables industry is the reduced cost of production. By manufacturing locally, brands can save on import duties and transportation costs, which can lead to lower prices for consumers. This has made smart wearables and hearables more affordable for the average Indian consumer, thereby increasing the adoption of these devices. This has also attracted new emerging brands such as Tempt, iCruze, Bluei, Nu Republic and Hearmo among others to foray into this market. Such brands are benefiting from the initiative either by manufacturing locally or partnering with a local manufacturer.
The “Make in India” initiative is not only boosting the domestic manufacturing industry, leading to the growth of the Indian smartwatch brands, but also creating job opportunities and helping the Indian economy to grow at a rapid pace.
Future Market Outlook
The Indian smartwatch market is expected to continue its tremendous growth in the coming years. With the increasing awareness of health and fitness, the demand for smartwatches with advanced health monitoring features is expected to grow. The increasing adoption of mobile payment and messaging features is also expected to drive growth in the mid-range segment. However, it will be the Tier-II and Tier-III markets that will witness significant adoption and drive market growth. That is also the reason that many brands are strengthening their partner ecosystem to reach these markets to capitalize, rather than just focusing on the D2C strategy. New entrants will continue entering the market, offering feature-rich smartwatches at competitive prices. Thus, making consumers spoilt for choice.
In conclusion, the Indian smartwatch market is poised for continued growth in the coming years, driven by factors such as the “Make In India” initiative, the growth of home-grown Indian brands, and the increasing popularity of smartwatches among consumers. While there are challenges facing the industry, such as intense competition and the need for continued innovation, there is no doubt that the Indian smartwatch market has a bright future ahead. Overall, the Indian smartwatch industry has the potential of becoming the global hub, especially for budget smartwatches, and targeting other emerging economies and countries. Thereby, making Indian brands become a ‘Global Indian brand’ in the coming years.
