FOCUS: Richer choice, lower prices propel Russia’s smartwatch market in H1

By Yekaterina Yezhova

MOSCOW, Aug 22 (PRIME) -- The Russian market of smartwatches quadrupled in money and added some 50% in units in January–June amid a widening range of devices and lower prices. The country’s leading retailers said the gadgets, which have not yet gone viral, are gaining popularity along with connection-obsession and fitness trends.

“Nationwide sales of connected watches spiked to 1.4 billion rubles in January–June from about 350 million rubles last year and grew 50% in natural terms to some 60,000 units,” Sergei Tikhonov, a spokesman for multi-channel retailer Svyaznoy, told PRIME.

Electronics seller M.Video had similar growth figures for smartwatches, while the company’s own sales rocketed five times in money and doubled in units.

“The market’s explosive growth can be explained by launch of a wide line of the Apple Watch in the second half of 2015. The Gear devices from Samsung were also popular,” an M.Video spokesperson said.

Svyaznoy’s spokesman said Apple Watch was an absolute champion on the country’s market in the reported period both in monetary and natural terms. “Among other leaders we can mention connected watches from Sony and Alcatel. Huawei’s positions improved in money and Asus advanced in units sold,” Tikhonov said.

He said Svyaznoy’s bestseller is Apple Watch. Sony’s SmartWatch is also winning popularity, as it is a model of a middle-price segment working on Android. It performs some functions of a smartphone as it shows calls, SMS and other activities, and it works as an audio player and a fitness tracker as well.

Huawei’s Honor Band model offers basic functions for a low price: it shows reminders and notifications, tracks distances and counts calories, as Svyaznoy sees it. Simple models cost about 6,000 rubles at Svyaznoy’s stores, while flagship Huawei smartwatches have a price tag of almost 34,000 rubles, according to the retailer’s Web site.

“We’ve seen the appearance of cheap gadgets meeting certain requirements of customers, like the Button of Life device, which has basic functions for child’s safety. The device has an emergency button, a geo-locator and a movement tracker. It can also take and make calls, as well as send text messages,” Tikhonov said. The device is sold at Svyaznoy’s stores at slightly less than 4,000 rubles.

Alexei Shirokov, director of the purchases department at retailer Euroset, said the market of smartwatches is still quite modest in absolute terms, as consumers widely perceive these devices as interesting toys. “A significant part of connected watches is still unofficially imported into the country,” he said.

Market potential

“The smartwatch market is nascent and has a huge growth potential. Several companies, including Huawei and Asus, offered the Russian customer during the first half of the year new ranges of the device in various price categories, from 10,000 rubles, which could vie with current leaders,” M.Video’s spokesperson told PRIME.

“We witnessed the following trends in the first half of the year: manufacturers create more advanced smartwatches and offer them in various price segments from flagship to the most affordable ones. If Svyaznoy had about 30 models of smartphones on sale in 2014, the range doubled in 2015–2016,” the retailer’s representative Tikhonov said.

“Regardless of a never-stopping increase of popularity over the recent quarters, smartwatches could be still hardly seen as a mass gadget, like smartphones. We think the market has a growth potential, and the number of aficionados of connected watches will multiply in the future,” he said.

“We think the market could be stimulated by wider functions of devices and a further decrease in their prices. Sales are promoted by a rising number of fans of fitness and healthy lifestyle since smartwatches have a wide range of useful options.”

(63.9391 rubles – U.S. $1)

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