In recent months, Samsung has observed an increase in customers choosing accessible financing options like Finance+ to purchase a Galaxy smartphone as an upgrade to a device with better performance.
Aditya Babbar, Senior Director and Head of Marketing at Samsung India, explains that Finance+ and other similar products are boosting smartphone sales in the world’s second-most populous nation. “When consumers walk in a store, they have a set budget and when the financing starts, they are told how they can upgrade,” he says.
Samsung’s easy-to-own lending program is not only helping first-time smartphone owners acquire a low-end Galaxy device but also driving sales of premium phones. He gives the example of the Galaxy A03 Core, which costs Rs 6,999 but can be had for Rs 900 per month with Finance+, making it more affordable.
In an interview conducted on the sidelines of the country’s launch of the new Galaxy A14 5G and A23 5G, Babbar tells indianexpress.com, “Affordability is playing a key role in smartphone purchase across price tiers in India.” Prices for smartphones range from Rs 16,499 to Rs 22,999.
According to Babbar, approximately 40% of consumers choose smartphones based on their affordability, and in the case of Samsung, that percentage rises to 60%. As a result, Samsung’s ability to reach potential smartphone users has grown three times faster than that of its rivals. He says, “Consumers are led in the right direction if we have a compelling proposition for good affordability.”
According to Babbar, affordability plans that cover the cost of owning a phone and 5G connectivity have both helped Samsung increase smartphone penetration in India, a market where the South Korean company has recently faced fierce competition from Chinese brands like Xiaomi and Realme.
According to Canalys, a market research company, Samsung overtook Xiaomi to once more become the largest smartphone vendor in India with a 21% market share in the December quarter of 2022.
Despite Babbar’s optimism regarding the handset market’s growth potential and ASP, insiders and analysts are already predicting a peak in smartphone sales in the world’s second-largest mobile phone market. According to the most recent information provided by India’s telecom regulator, the country had approximately 790 million subscribers to wireless broadband in October of that year.
That number barely broke the previous record, which stood at 789 million in August 2021. Smartphones, the primary means of internet access in India, have also experienced slow growth in recent quarters. According to research conducted by Canalys, smartphone shipments in India decreased by 6% from 2021 to 2022, reaching 151.6 million units.
However, India’s situation is indicative of global trends. Users are reducing their smartphone purchases as a result of rising manufacturing costs, rising chip prices, the war in Ukraine, and looming fears of an economic slowdown. Around the world, smartphone sales are declining, particularly in China and Europe, where quarterly declines are very similar.