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Small Indian cities fuel smartphone sales; global consumer spend on digi content to rise: IDC

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NEW DELHI: Non-metro Indian cities, mainly those in Tier 2 and 3 (population between 20,000-100,000), have fuelled growth in smartphone sales during the festive season between August and October, according to International Data Corporation (IDC), which said total sales in such cities grew 23.3 per cent over the previous month as per Monthly City Level Smartphone tracker.

In another forecast, IDC said global consumer spending on digital devices, services and content will reach $3.4 trillion in 2020, rising 4.7 per cent annually from 2015. The global forecast is from a newly launched research program, Consumer Spending Priorities: Tech and Services, which provides a holistic view of consumer spending across all goods and services.

Meanwhile, Retail Asia, quoting IDC data relating to Indian smartphone sales, said the growth was largely due to vendors focusing on new affordable launches, higher spending on marketing and innovative payment options. IDC India senior market analyst Upasana Joshi said the key four months from July to October 2016 made up more than 40 per cent of annual smartphone sales. The festive season in India started in August with Independence Day and ran until Diwali in October.

“Multiple sales by all major e-commerce players in October with their high-decibel marketing, attractive payment options, and exchange offers also helped in growing the market. The top 8 to 10 cities of India constitute the major portion of online sales, leaving a yawning gap between these markets and the still largely untapped smaller towns,” Joshi was quoted as having said.

Joshi, who disclosed that China-based players contributed significantly to the growth at the offline retail counters while continuing to dominate the online channel, said, “These vendors collectively accounted for more than 40 per cent market share in the top 30 cities during Diwali month, primarily driven by 4G enabled handsets. Oppo and Vivo continue to shake the traditional line up of Indian vendors with their superior build quality, massive marketing investments in the offline channel.”

Global Digital Spending on Content To Rise By 2020

Coming to market research firm’s latest data on global digital spending by consumers, IDC said the share of consumer digital spending on devices will fall from 28 per cent in 2015 to only 22 per cent by 2020, but consumer spending on digital content will rise at a 12.6 per cent annual clip, according to the CSP, a twice-annual pivot table. Digital services, however, will maintain its 61 per cent share of consumer digital spending by growing 4.9 per cent annually.

According to IDC, a global provider of market intelligence, advisory services, and events for the IT, telecommunications, and consumer technology markets, while total consumer digital spending is going up, the nature of spend is changing. For example, just as consumers shift spending towards digital content, consumers worldwide are moving digital spending towards online media and away from entertainment devices.

Consumer spending on online media will grow 12.6 per cent from 2015 to 2020, while spending on digital communications devices and services will grow at a mere 1.6 per cent annual rate as consumer spending on voice services, both fixed and mobile, declines in absolute terms from 2015 to 2020.

"Clearly the value of the devices is derived primarily as conduits for the content and services that they transport and the applications that they enable," said Jonathan Gaw, research manager for IDC's Consumer Spending Priorities: Tech and Services program.

Much of the change in consumer spending categories is driven by regions outside of the United States, where the shift among spending categories continues but is largely complete and the share of spending by solution type is largely stable, IDC said, adding that in developing countries, however, consumer spending on digital content and services vs. devices, is still gaining, while online media spending also increases in wallet share.

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