Flipkart aims to corner 40% share of entire smartphone market by 2020

While it continues to maintain a lead over arch-rival Amazon in the smartphone segment, e-commerce giant Flipkart is looking at making its platform more attractive by offering a gamut of services.

Its ‘Mobiles 40by20’ strategy is aimed at taking a 40 per cent share of the entire smartphone market, online and offline, by 2020. Ayyappan Rajagopal, its senior director, smartphones, told Business Standard the intent is to build ‘all-round platform’ capacity, offering services to buyers across the processes of payments, buyback and mobile protection.

Flipkart, now majority-owned by US multinational retail giant Walmart, has been building its smartphone category over years. The e-tailer started by launching Motorola phones for Indian consumers. It then went on to forge exclusive partnerships with other smartphone makers. 

“We re-introduced some iconic mobile phone brands like Motorola and Nokia over the past few years. We have also built awareness around smartphones in such a manner that the consumer base is aware about what they should be looking for. The next step is to boost it with our portfolio of platform services,” said Rajagopal.

Flipkart has introduced a number of programmes in this regard, such as monthly instalments on debit card payment, device exchange systems, phone service options and buyback guarantees. Rajagopal says these have together helped the time taken for users to upgrade devices from around 24 months in the past to 12-18 months now. With the ‘cost of ownership’ reduced, consumers seem more confident about replacing their devices on a regular basis, he added. 

Flipkart has already secured a corporate agency licence from the insurance sector regulator. It has partnered Bajaj Allianz General Insurance to offer a mobile phone insurance scheme. Customers who buy the plan will be offered a cash payout or a free pick-up and drop facility if their devices get damaged or stolen. Flipkart is also in the process of applying for a non-banking financial company licence, enabling it to lend to customers.

It claims 25 per cent of the country’s overall smartphone market in the country. And, says it is confident of making it 30 per cent this year — online festival sales for both Flipkart and Amazon ended on Monday. Excluding the festive sales, Flipkart claims almost 65 per cent share in the online smartphone market, adding this should reach 75 per cent by the end of this year. While the major value-driving segment for Flipkart smartphones are in the Rs 10,000-15,000 range, the volumes still come from the Rs 7,000-10,000 and Rs 4,000-7,000 ones. Flipkart says 65 per cent of smartphone sales on its platform are being driven by customers from non-metro regions. 

“Even the growth rate of smartphone sales in smaller cities is twice of what is seen in metros. Further, non-metro buyers have a shorter upgrade cycle for phones. While the average refresh time for smartphones across the country is 12-18 months, Flipkart has witnessed customers from non-metro regions upgrading it within eight to nine months,” Rajagopal said. 

Flipkart and Amazon have been in a constant tussle for market share in the country, with smartphones one of the most important segments for both. 

Flipkart has partnerships with Chinese manufacturers Honor, Infinix, Poco, Realme and Asus, among others, for devices that retail specifically on their platform. Amazon has partnerships with higher-end brands like OnePlus and Samsung, driving higher ticket sizes.