FEATURE PHONE MARKET IN INDIA – REMOVE URBAN AS 2ND USER

In India, mobile penetration has moved beyond the urban cities to reach the tier-2, tier3 cities and
other rural parts of the country as well. According to Telecom Regulatory

Authority of India (TRAI), as of June 2017, there were 499 million mobile subscribers in

rural India, and another report points out that rural markets account for 60% of the new

mobile subscription growth in the country.

Now feature phones though have a strong rural Market, but let’s not miss the Urban

Population who too own the Feature phone as the second phone. Recent studies

suggested among the Urban consumers 56% of them also own Feature phone as the

second phone. Having said that, the majority of the feature phones, still owes it to

the rural population. Not only are the rural markets unexplored, but also majority of

the population is rooted there and in future the no is likely to grow, with growing

population.

The Indian feature phone market saw a decline of around 24% year-over-year in the

first quarter of 2020, implying consumers are transitioning to smartphones. With the

Covid-19 pandemic leading people to cut on discretionary spending, the India feature

phone market declined 68% (year-on-year) in the second quarter this year, a

Counterpoint Research report said.

Consumers in this highly cost-sensitive segment tried to save money by reducing

discretionary purchases, said the report. The nationwide lockdown imposed by the

Indian government to combat Covid-19 resulted in zero shipments during April. This was

also the time which saw a huge exodus of migrants from cities as many of them lost

livelihood.

(*Economic Times, Business Standard, India TV News)

RISING POPULARITY OF SMARTPHONES

As per the InMobi research, 90% of India will own a mobile phone by 2022, and

60% will use a smartphone by 2025. A distinctive feature of these trends is that it is

not just restricted to metro cities only. Tier II & III cities of India are bringing an

ever-increasing number of people on the smartphone platform. Spread across all

demographics, India is moving away from traditional means of content consumption

to more convenient and one-to-one interactions made accessible by mobile phone.

Further, for gaming, video-viewing, social media, and shopping, mobile is now the

primary screen for users.

In a nutshell, the consumption trend is triggered by factors such as affordable 4G

smartphones, data plans and awareness programmes that are bridging the digital

divide eventually sewing rural India in the Digital India journey.

Here are some observations that are driving smartphone penetration across rural

India:

1) Rural millennials bringing a seismic shift in purchasing decision

According to Kantar IMRB report, the millennial population of India is approximately

450 million, out of which around 300 million millennials (67% of the total population)

live in rural India. As per the research, the desire to improve their economic status is

a key driver for rural millennials irrespective of their gender. The segment with

higher aspirations, increasing purchasing power, evolving consumption patterns, and

access to the world through Internet have emerged as the fulcrum of rural India that

currently controls the rural economy as shoppers, makers and particularly as trendsetters.

Today, the smartphone penetration in rural and semi-urban demographics has

witnessed a significant shift with an increase in user base to 40-50% from 29% five

years ago. This trend is also attributed to the smartphone wave sweeping across the

rural markets instigated with factors such as affordable device ecosystem, innovative

and trendy features and most importantly, the aspirations of rural millennials.

2) Sneak peek into the mindset of rural millennials

The 300 million rural millennials which represent 36% of the Indian rural population

are at the helm of defining the smartphone purchase decisions across the region.

Rather than aimlessly following brands and names, these millennials, who are

mindful and brand cognizant is settling on choices that elevate their social status

comprising quality, latest and trendy features while affordability being the heart of

the purchasing decision.

As far as psychographics is concerned, this fragment is further partitioned into

minimalists and aspirers. Minimalists are the individuals who own feature phones and

are keen to move up to an entry-level smartphone. Feature phone users and as the

technology is spreading its wing this segment is expected to witness a transition to

an entry-level smartphone.

On the other hand, aspirers are individuals who are eager to adopt innovation and

shift to an upgraded smartphone model offering high-end features and is the latest

and trendy technology in the market. The aspirers essentially look forward to

features such as face unlock, fingerprint sensor, AI dual camera and Waterdrop HD

display, etc. which makes them socially advance and add a style statement to their

persona.

3) Localized marketing approach - A key to success

A ‘one size fits all’ strategy is a recipe for failure, brands must create personal

connections and interaction opportunities that seamlessly help integrate experiences

of rural millennials in their everyday life. Distribution strength, deep market

penetration and understanding the consumers’ aspirations etc through intense

market research while assuring a strong service promise are the key tenets for

winning this consumer. Locally relevant and targeted outreach along with a

compelling proposition of an affordable price point combined with futuristic features

is what rural millennials aspire to own.

Another most important aspect of this market segment is making the populace

comfortable with these new technologies. The power of today’s technology, the new

thrust areas and the opportunities of growth that it offers are key aspects that

require an awareness and education drive. Brands that take this mantle of

responsibility stand out and builds consideration.

Apart from this, with likes of Facebook and Instagram still going strong, rural

millennials are switching to newer networking platform for different experiences and

content. Platforms like TikTok and Helo were popular in the segment and with the

mantra that every user can be a creator from their smartphone, these digital

touchpoints are becoming addictive and highly entertaining eventually providing

leverage for brands to tap these rural millennials. Now that these apps are banned,

creators are moving to platforms such as Instagram and Facebook.

(* Business World)

KEY TRIGGERS TO MOVE FROM FEATURE PHONES TO SMARTPHONES

CHALLENGES ANTICIPATED AND ASSOCIATED WITH THE ADOPTION OF

SMARTPHONE TECHNOLOGY

1) Not a necessity

India is a price sensitive market and hence consumers (especially in tier II, III cities

and rural areas or maybe overall) display a very cautious spending behaviour. One of

the possible reasons is affordability and socio-economic behaviour of Indian

consumers. While urban population is increasingly growing tech savvy, consumers

from smaller towns and rural areas are still marginally exposed to the technological

advancement that India and the world has moved towards. The pace at which this

segment of population is coping up with the advancement is considerably low

because of which they feel more comfortable with the conventional way of

communication. The basic need for a phone till date is to make and take phone calls

for majority of people. Therefore, the rate of migration from feature to smartphone

is slow and hence feature phones continue to account for more than half of the total

Indian mobile phone market.

2) A large investment

With rural India, price always remains the primary concern and this factor has been

one of the key growth drivers for the market. Feature phones serve the purpose of

low-income groups but also holds the aspirational value of owning the phone. Price is

an important point of concern for them and feature phones turn out to be an

attractive buy.

3) Not a digital native

Feature Phones define convenience and also ease of use. Feature phones not only

bring a stronger battery life, an ease of repair, but an overall reasonable data plans

suiting pockets along with the phone. Another aspect, though consumers are using a

feature phone; it does bring a feel of the smartphone too…with basic internet usage,

essential apps like Facebook etc preinstalled consumers don’t seem to miss

upgrading to a smartphone.

ABOUT NOKIA’S C3

1) Rear Camera: 8 MP auto-focus, F2.0, with flash

2) Front Camera: 5 MP, F2.4

3) Display Size: 5.99” (15.2 cm)

4) Display Type: HD + IPS with toughed glass

5) Colours available: Nordic Blue & Sand

6) Operating system: Android 10

7) RAM: 2 GB & 3 GB

8) CPU: Octa-Core 1.6 GHz

9) SIM cards: Dual SIM

10) Keys: Google Assistant button

11) Battery Type: Removable 3040 mAh2

12) Internal Storage: 16 GB & 32 GB

13) Maximum standby time up to: 16.5 days

14)Price: ₹6999 - ₹7999

Below are the specifications that resonate:

COMPETITIVE LANDSCAPE INDIA

The best budget smartphone will come in different sizes and USPs. Thanks to

advancing technologies, 4G smartphones under Rs. 8000 are easily available.

Brands like Samsung, Realme, and Xiaomi offer a range of phones in this segment.

Notch cut out screens, dual rear cameras, big batteries, etc are the norm in this

segment. However, due to Covid-19 many Indian users have boycotted Chinese

products and so this leaves a huge opportunity for brands to enter or grow within the

market.

COMMUNICATION TASK

1) The task is to provide a communication strategy that details out the way forward for

Nokia C3 – building the bridge between futuristic smartphones and run-of-the-mill

feature phones.

2) How do ignite relevance and drive consumption among consumers.

3) And more importantly how do we engage with consumers who are currently

choosing other brands they love like Micromax, Lava, Xiaomi etc. over us.