FOCUS: Wider, cheaper product range propels smartphone market 60% in Q3

By Yekaterina Yezhova

MOSCOW, Oct 17 (PRIME) -- A richer range of models, affordable prices, and flagship releases boosted July–September sales of smartphones in Russia by 60% on the quarter in units to 7 million, a signal of recovery of the market, which is yet below its 2021 size, retailers said.

“Russians’ interest to smartphones grew thanks to favorable assortment, lower prices, expansion of offers in the medium price segment, and the start of sales of new models. Seasonal sales ahead of a new academic year contributed to the upbeat quarterly dynamics,” Nikita Tikhvinsky, head of the digital devices cluster at electronics retailer M.Video-Eldorado Group, said in a note.

After the announcement of partial mobilization in the country on September 21, demand for feature phones, permitted for the use by conscripts unlike smartphones, grew.

Mobile Research Group said earlier that sales of feature phones in the country rocketed by up to 250% on the week on September 21–25. Mobile operator MegaFon, which also runs a wide retail chain, said then that its sales of such devices leaped by 86% on the week in the same period.

M.Video-Eldorado Group calculated that smartphone sales increased to 7 million devices in July–September from 4.4 million in April–June, but the volume was still smaller than in the same period of 2021. The July–September market was estimated at 145 billion rubles, and the average check fell 9% on the year to 21,000 rubles.

The bestsellers were the devices in the price range of 10,000 to 30,000 rubles, while the flagship devices remained popular and accounted for 10–15% of total sales, flat on the year, according to M.Video-Eldorado.

Electronics retailer Citilink said that its sales of smartphones in units increased by almost 50% on the quarter in July–September. “Buyers delayed shopping in April–June because some brands quit. Now the smartphone assortment has recovered, flagship models by the leading manufacturers are on sale,” a Citilink spokesperson told PRIME.

“In July–September, the most popular brands in sales in units were Xiaomi, realme, and Samsung. The top three bestsellers were Xiaomi Redmi 9A, Xiaomi Poco M3 Pro, and realme 8.”

According to mobile operator MTS, which also runs a monobrand retail chain, Xiaomi and POCO brands held 41.3% of the market in units, realme had 16.4%, Samsung 9.5%, TECNO 9.1%, and Apple 6.3%.

“Chinese brands – Xiaomi, realme, TECNO, POCO, Infinix, Itel, and others – show rising dynamics, multiplying in some cases, thanks to impressive expansion of the offer in the basic and medium price ranges and continue to cement their positions,” M.Video-Eldorado said.

“So, the brands from China obtained in total more than 70% of all sales in units in Russia, while a year earlier they accounted for slightly more than half of the market. Xiaomi maintains its leadership followed by realme, and TECNO is on the fifth rank. The top five popular makers still comprise Samsung and Apple.”

Tikhvinsky said that M.Video-Eldorado added 30–40 new models to the medium price segment in its stores. “We widened the range of brands significantly, for example Xiaomi, realmå, TECNO and brought new ones, like Wiko,” he added.

The group and other retailers also offer pricey flagship devices, like Apple’s new iPhone 14 models and Samsung’s foldable gadgets Galaxy Z Fold 4 and Flip 4 brought to the country as parallel import.

“It was at the end of July–September when the chief new device of the 2022 smartphone market, the iPhone 14, hit the shelves. The demand for the iPhone 14 on Yandex Market was several times higher than a year ago at the start of sale of the iPhone 13. It happened thanks to some factors, including a significant drop in commission for the sellers of the new gadgets and growth of the marketplace’s overall audience,” a seller spokesperson told PRIME.

Tikhvinsky at M.Video-Eldorado said that the consumer mood changed in the second half of September and demand is now still below the average of July–September and 2021.

Eldar Murtazin, a leading analyst at Mobile Research Group, said earlier that total 2022 sales of smartphones in the country may decrease by 23% on the year to 24.5–25 million units, while in rubles the market may stay flat on the year. In 2021, the market leaped by a third to 730 billion rubles, according to previous reports.

(63.0558 rubles – U.S. $1)

End