This Diwali, Indians will buy more smartphones than ever before

Time for more selfies.
Time for more selfies.
Image: Reuters/Darren Staples
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The festival of lights is about to set India’s smartphone market alight.

According to Hong Kong-based consultancy firm, Counterpoint Research, India—the world’s fastest growing smartphone market—is likely to record the highest-ever quarterly sales of smartphones during the October-December period.

The festival season, which is considered auspicious for making purchases, already contributes about 40% to India’s annual sales of electronics, but this year’s outlook is especially robust.

In anticipation, mobile phone makers have already dispatched large volumes of devices. During the July-September quarter, shipments of mobile phones to India were the highest ever at 28 million units, according to Counterpoint Research.

“What that means is that the Diwali quarter will have the highest sell-through ever,” Tarun Pathak, senior analyst at Counterpoint Research, told Quartz. “Sell-through” is a trade jargon for the ratio between the number of phones sold by a retail outlet and the quantity distributed by the wholesalers.

In recent months, India’s overall mobile phone market has showed signs of slowing down. For two consecutive quarters—Q4 2014 and Q1 2015—the number of mobile phones shipped into the country actually declined. Much of that was due to the fall in the sales of feature phones, but smartphones are going in entirely another direction.

Apart from strong festive demand, two other trends continue to dominate India’s smartphone market, according to Counterpoint Research. First, with improving internet penetration, more Indians are graduating from basic phones to smartphones. And second, increasing numbers of users are changing their smartphones with greater frequency.

“Earlier, Indians were upgrading their smartphones every 12 to 16 months,” said Pathak. “That has now come down to (between) nine and ten months.”

None of this has done much to alter the pecking order of India’s smartphone makers, with Samsung still leading and Micromax trailing in second place.

However, over the past few months, Chinese phone makers have been pushing hard to expand their presence in the subcontinent. ”Shipments by Chinese companies have grown some 300% in the last year. And companies such as Oppo and Vivo are aggressively working on building their brand in India,” said Pathak.

The fight over India’s smartphone market is only going to intensify.