How to crack India’s smartwatch market
Bengaluru: US retailer Fossil Group Inc. is just days away from launching “FossilQ” in India, marking the second launch of a smartwatch by a traditional watchmaker in as many months in Asia’s third-largest economy.
India’s own Titan launched “JUXT Pro” in August, even as outsiders such as Apple, Samsung, Motorola and Huawei continue to try to crack India’s nascent smartwatch market.
The incentive to bring smartwatches to India is simple: 1.2 billion people, its burgeoning middle class and their consumption patterns that often reflect aspirations well beyond income levels.
But, unlike smartphones and other product categories, the average Indian shopper is still not completely sold on the smartwatch, experts said.
“At this stage, consumers are mostly using it for testing and, hence, investing in low-end devices with basic features,” said Raj Nimesh, a senior market analyst with IDC India’s Client Devices team.
The Indian smartwatch market accounted for around 1% of the global pie in the second quarter, with 34,000 units shipped here versus 3.5 million worldwide. While the larger wearables market grew 41.9% sequentially in the same period, IDC data showed over 80% of the items sold were in the basic segment with items priced below $50.
Smart wearables, with an average price of $200, are still viewed as premium devices that not many can afford.
So what needs to change?
For the market to turn around significantly, models with lower price points but better features are key, said some analysts. FossilQ—like its existing counterparts—to break that price barrier.
Fossil’s India team declined to reveal additional details before the official launch, but a salesperson manning one of its Bengaluru counters said it should be priced between Rs.30,000 and Rs.35,000.
Titan’s JUXT Pro is priced at Rs.22,995, and Motorola and Samsung’s smartwatches start at similar price points.
At the higher end are Apple’s watches. A Mint survey of Apple stores in Mumbai, Delhi and Bengaluru found that of the company’s smartwatch variants, the basic Rs.30,000-odd version is most in demand. The more expensive models, which can cost up to a lakh or more, aren’t stocked and are available for purchase only via bookings.
“If they (all smartwatch makers) are targeting volumes, then prices need to correct considerably or else they’ll continue to remain niche players and the category may not grow substantially,” said Sameer Deshmukh, an analyst at Reliance Securities.
Indeed, smartwatches have not taken off as well as they were expected to globally and, in comparison, not at all in India.
“Today it’s common for people to buy a smartphone on EMI but how many do that for a smartwatch?” asks Vipul Ganatra, who owns an Apple Watch and runs an event management firm called Even Flow Experiences.
Currently, no big name has figured the secret sauce to own the market or has all the odds in its favour, which is perhaps why another entrant has competitors unperturbed.
When asked if Fossil’s entry fanned concerns, Titan’s watches and accessories CEO S. Ravi Kant put it succinctly: the market is big enough.
“India is such a large market. There are consumers at different price points and there are different types of consumers with different needs,” he said in an interview.
Apple, which is bringing its newest smartwatch to India next month, declined comment. Samsung, Motorola and Huawei did not respond to requests seeking comment.
Samsung and Motorola featured among Edelweiss Securities’ senior vice president’s top picks of possible market leaders in India over the long run.
“In my view, Titan because of distribution, brand and innovations; Samsung, which already has a big presence; and Fitbit will be the key players. Moto, Timex can also do well. The darkhorse will be Mi,” said Abneesh Roy.
In many ways, customers like Ganatra might have the best tip for anyone looking to sell smartwatches in India.
“If a smartwatch allows you to control your car, house, lights, integrates seamlessly with your other gadgets but has a much more evolved brain of its own—that’s when it becomes a necessity. Until then it will only be very few people who buy it either because they are gadget-crazy or because, like me, their lifestyle or job requires them to keep up with the times,” he said.
Sapna Agarwal in Mumbai and Sounak Mitra in Delhi contributed to this story.