In 2023, it is anticipated that a significant portion of smartphone sales in India, approximately one-third, will be financed. This marks a notable increase from the figures of 25% in 2022 and 18% in 2021. The driving force behind this trend is the enticing financing schemes offered by smartphone brands in response to a surge in festive season purchases.
Smartphone Financing on the Rise: Shifting Trends and Impacts in 2023
As we move into 2023, it is expected that a record percentage of smartphones will be acquired through finance schemes, particularly in the premium segment (devices priced above ₹30,000), where half of the sales are projected to originate from easy financing options. In the more affordable segments (devices priced under ₹30,000), this marks a significant shift, with a quarter of total sales expected to come from financed purchases.
The year 2022 already witnessed around 25% of premium smartphones, including brands like Apple, Samsung, and OnePlus, being sold through staggered payment plans, often with zero interest or processing fees.
This trend is gaining momentum not only in the premium but also in the sub-premium segments. Brands like Xiaomi and HMD Global are forming partnerships with financing entities, including banks and non-banking financial institutions.
Interestingly, Samsung’s resurgence in the Indian smartphone market’s leadership position since late 2022 can be attributed, in part, to its finance scheme, Samsung Finance Plus. This program offers buyers various payment plans, including a card-based cashback option, exchange deals, and an 11-month EMI plan, which is more extended than the six-month plans offered by other brands. Furthermore, Samsung allowed consumers across various urban and rural areas to avail themselves of these financing options while maintaining low delinquency rates, setting a precedent in the industry.
Affordable Financing: Revolutionizing Smartphone Purchases and Festive Sales Trends
The surge in smartphone prices over the past 12-24 months, with an increase of 30%, is a key driver for consumers’ preference for finance schemes. As average sale prices rise, consumers are increasingly seeking high-end devices, making affordability a critical factor.
Brands like HMD Global have responded by offering digitally-approved loans without paperwork through schemes like HMD EasyPay, in partnership with DMI Finance. This approach is expected to expand their customer base by 25-30%, particularly among first-time consumers and those new to credit.
Xiaomi, which was a market leader, introduced its no-cost digital monthly installment scheme, the Xiaomi Easy Finance Program, in partnership with Axio and Trustonic. The offline market strategy has enabled the Chinese brand to broaden its reach and capture a larger share in both affordable and high-end smartphone segments.
Overall, these financing schemes are contributing to strong demand for premium devices, setting a positive tone for the festive season. Analysts anticipate a 7% year-on-year growth in volumes and a 15% year-on-year increase in average sale prices for festive season smartphone sales this year.
