War of wearables

India’s smartwatches market is now dominated by brands that sell affordable gadgets.

Fitness bands are slowly losing ground to smartwatches, now that many come equipped with features like SpO2 measurement, notifications from phones and built-in GPS at reasonable prices. Market research firm IDC has found that the market for wristbands declined by 34.3% y-o-y in 2020, after peaking in 2019. Around 3.3 million units of wristbands were shipped in India last year. Meanwhile, smartwatches saw a 139.3% y-o-y growth with shipments amounting to 2.6 million units in 2020.

The trend continues in 2021— market for wristbands declined 22.4% in the January-March quarter, compared to the same time last year; while a total of 1.4 million smartwatches were shipped in this period alone. Several wearables manufacturers introduced smartwatches in the past one year: Xiaomi India, which is a leading player in the wristband category with 46.7% market share, launched the Mi Watch Revolve in September; Boat joined the party in October; while Realme launched its first smartwatch in May 2020.

The price is right

Jaipal Singh, associate research manager, IDC, says, “In 2020, the early adopters of fitness trackers migrated from using wristbands to smartwatches.” Whereas, in 2021, people who never used a wristband are directly purchasing smartwatches, resulting in the addressable market expanding, he adds.

India’s smartwatches market is now dominated by brands that sell affordable gadgets. Noise entered the market about four years ago with smartwatches alone, no wristbands, and commands the lion’s share in the smartwatch market — as per IDC, in Q1 2021, it had a share of 26.7%, followed by Boat with 21.9%.

Anshika Jain, senior analyst, Counterpoint Research, notes that 10 new brands launched smartwatches since 2020, while only four launched wristbands. The proliferation of newer brands and the increase in sales volumes have been driving down the price of smartwatches. Sample this: the average selling price of smartwatches has fallen from $166 in Q1 CY 2020 to $88 in Q1 CY 2021.

Xiaomi launched an affordable watch under its Redmi brand at Rs 3,999 in May 2021. The Mi Smart Band 5 and the basic watch from Noise both cost Rs 2,499. Boat has slashed the prices of several of its smartwatches down to Rs 2,999. Amazfit, another popular brand, debuted in India in 2018 with two watches at different price points: Rs 5,499 and Rs 15,499. The brand now sells three watches under Rs 5,000.

Among the first few smartwatches from Noise was the Noise Loop Smartwatch, launched in 2017, at Rs 4,999. “When bands were first introduced, people were wearing both analog watches and fitness bands,” observes Amit Khatri, its co-founder. Back then, the market mainly had premium products from Apple and Fitbit, which could play the role of a watch, fitness tracker and complement the smartphone.

Meanwhile, Goqii, which has been in the fitness band segment since 2014, entered the smartwatch category last year with its Smart Vital Watch priced at Rs 5,999. Vishal Gondal, its founder and CEO, says, “Bands are akin to feature phones, while smartwatches are like smartphones.”

Standing out

Most smartwatches mimic the design of the Apple Watch, and appeal to consumers who aspire to own a premium device but can afford much less. Packing in features at incredibly low costs is the name of the game. “Brands will need to offer a smooth user experience with relevant features to ensure consumers don’t shelve the gadget after a few months of use,” says Jain. For instance, including features like Bluetooth calling, which is not common among most gadgets, could take a smartwatch’s appeal a notch higher.

Smartwatches that can support third-party apps account for almost one-fourth of the market today. Apple leads this segment with around 51% market share. To unlock growth and differentiate, Jain says, brands need to work on supporting third-party apps. Samsung, for instance, is moving to Google’s Wear OS for its smartwatches to better integrate the gadget with smartphones.

Another aspect of differentiation could come from partnerships with healthcare institutions and fitness trainers. Goqii has built an ecosystem around its products which brings together coaches, health experts and insurance companies. Anand Ramanathan, partner, Deloitte India, says, “If brands want to charge a premium, they will need to make alliances that make them stand apart from competition. Partnerships are the surest way of achieving that.”

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