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According to a new report by research firm Counterpoint, India's overall online smartphone shipments grew 23 percent annually, faster than the overall smartphone market in 2017.
More than half of the online smartphone channel volumes, as well as value, were dominated by Flipkart in 2017, followed by Amazon and Mi.com. Online exclusive smartphones were the main contributors to the online sale, a report said.
The report further said that seasonal sales events, aggressive promotions and value for money offerings from Chinese brands drove the demand for the online channel.
Tarun Pathak, Associate Director at Counterpoint Research said, "Online channel contributes to more than one-third of the total smartphones shipped in India during the year, which is the highest in the world. Flipkart led the online smartphone channel capturing more than half of the market in both volume and value terms maintaining its lead with Amazon. However, Amazon also able to grow share capturing almost one-third of the market in volume and value terms. Indian online channel market has become a duopoly with Flipkart and Amazon capturing a combined 84 percent of the total volume and 87 percent of the total value.
Counterpoint said that together Flipkart and Amazon were able to attract a lot of brands and consumers on their platforms by launching close to 100 exclusive model SKUs throughout the year.
However, these platforms will have to adopt multiple strategies from increasing number of serviceable ZIP codes, hybrid offline stores, and customer service kiosks to attract and gain more users to the platform.
Furthermore, the firm pointed out that the top three online smartphone brands contributed to 75 percent of the online smartphone market. Xiaomi, Lenovo, and Samsung were the top 3 brands on Flipkart as well as Amazon.
Close to 100 exclusive smartphones were launched on online platforms in 2017. Smartphone brands are also launching special edition smartphones like specific color variants.
Online-only brands are now expanding to offline for growth. Xiaomi is expanding its reach with Mi preferred partners, Mi homes while Motorola is expanding with Moto Hubs.