Indians begin to buy premium electronics online
Average billing size for television sets sold online has gone up by 50%, while for appliances and smartphones it has increased by up to 20%.
Indian consumers have started to buy premium smartphones, large screen televisions, multi-door refrigerators and large capacity washing machines online, pushing up average billing sizes for these categories in the country’s two largest e-commerce marketplaces, Flipkart and Amazon.
The average billing size for televisions sold online has gone up 50%, while for appliances and smartphones it has increased by up to 20% in the last one year, industry players and analysts said.
Industry executives say that now consumers have shed the inhibition to purchase costly products online which even last year, was mostly for small-ticket items, and now the brands are launching products priced even up to couple of lakhs.
Samsung last month launched its global flagship refrigerator, Family Hub, at Rs 2.8 lakh through Amazon and its own exclusive offline stores and it was sold out. British premium consumer technology brand Dyson, which sells a vacuum cleaner for Rs 45,000, too is selling online in India. Sony and Samsung are selling 4K TVs of 65-75 inches at Flipkart priced up to Rs 4.8 lakh, while Amazon has expanded its collection.
Riding on online sales, OnePlus became the largest smartphone brand in Rs 30,000-plus segment beating Apple and Samsung in the April-June quarter. Xiaomi’s Poco smartphone priced at Rs 20,999 and above sold over a lakh in less than five minutes on Flipkart on Wednesday. Samsung, Huawei and Oppo too are launching online exclusive premium smartphones priced between Rs 20,000 and Rs 35,000.
“Consumers are now even ready to spend in lakhs for online purchases,” said online exclusive BPL’s COO Manmohan Ganesh. “These are consumers who have already purchased products online and have gained confidence.” BPL is soon going to launch refrigerators and televisions priced up to Rs 60,000-70,000 compared to the earlier high end pricing of Rs 45,000.
OnePlus India general manager Vikas Agarwal said Rs 30,000-plus smartphone segment is 4% of the total offline smartphone market but for online its contribution is 7%. “Online alone now accounts for 60% of total premium smartphone sales in India. The rise of online is interesting, since most of the consumers are technologically savvy and white collar managers and it is not easy to hard sell to them,” he said.
Hong Kong-based cellphone market tracker Counterpoint Research analyst Shobhit Srivastava said the average selling price for smartphones sold online has gone up by 10% in April-June compared to the same period last year. He said apart from the brands launching more models at higher prices, consumers upgrading smartphones are shelling more money for a new smartphone than they did in the past.
A Flipkart spokesperson said the reason behind the surge in average billing is due to expanded selection and several premium launches by big brands poised to grow further this festive season.
“Even some of the overseas brands are now looking to enter India through Flipkart. Factors like no-cost EMI, debit card EMI, exchange and buyback guarantee for smartphones, addition of customer experience videos have helped increase our conversion rate of premium products in the last one year,” the spokesperson said.
An Amazon India spokesperson said the demand for premium brands is high even in tier 2 and 3 markets. There is a surge in the purchase of premium OLED and QLED TVs and niche categories such as chimneys and dishwashers. The spokesperson said increasing internet penetration, mobile shopping and better spending abilities has driven premium product sales online.
Smartphone, televisions and appliances together account for over 60-65% of total e-commerce sales in India and online accounts for 35% of total smartphone sales, while for television it is 15% and 6-8% for appliances. “Consumers are now even ready to spend in lakhs for online purchases,” said online exclusive BPL’s COO Manmohan Ganesh. “These are consumers who have already purchased products online and have gained.