In the words of famous activist, entrepreneur and thought leader Bryant McGill, “Crisis is a messenger”. It is a reflection that has resonated with me strongly and withstood the passage of time, simply because of the magnitude it portrays. And as the world grapples to come to terms with the fall-out of a far-flung crisis, a global pandemic that is upending businesses and human lives, this message makes a loud knell once more. Covid-19, its onset, and its subsequent impact is a message for us to re-engineer our decisions and actions and chalk out a future-proof new plan of action. It calls for us to be visionaries, prepare a resilient strategy and hit the ground running to offset the losses accrued over the past few months.
Seismic shifts in the industry
The Covid-19 pandemic has had a ripple effect on every industry and smartphones have been no exception. With sales and production halted for over two months, the bottom lines of various manufacturers have been deeply impacted. Additionally, with migrant workers and truckers going back to their homes, manpower disruption was also seen amid the lockdown. Various other factors such as the fluctuating ₹ vs $ exchange rate, price hike on products due to increase in GST, and rise in price of imported components have put the smartphone industry in the throes of crucial challenges. The impact is simultaneously evident on the consumer psyche. With economic uncertainties and a job crisis looming large, aspirational mindsets have turned thrifty, and rightly so. Instead of spending lavishly, consumers will tend to look for utilitarian buys that satisfy their immediate needs while seeking premium features. Looking at this microcosm of converging trends, we can safely say that the smartphone industry is poised at a tipping point of change.
According to Counterpoint, the overall smartphone market size for 2019 was 158 million and is expected to be 142 million for 2020 (it has now revised the 2020 number to 137 million). Also, according to a study by IDC, the 2020 market sales would face a “U” shaped scenario. I believe that the ongoing pandemic would be more likely delaying the demand for smartphones instead of cancelling them. The purchasing demand would still be massive if you look at the overall market in 2020.
Green shoots of recovery
Social distancing has redefined how people use smartphones, with it becoming an extension of a consumer’s persona. Smartphone usage has been radically redefined in the face of the pandemic, as it became the touch point in learning new skills, communicating with loved ones across the globe, upskilling yourself, working remotely, and many such activities. In fact, with contactless payments and shopping assuming greater relevance, smartphone usage increased in direct proportion to mobile commerce. And after initial headwinds, manufacturers are steadily stepping on the pedal on resuming operations as well as delivering products across green, orange, and red zones, pan India.
Spotting the new bellwethers
Considering that the pandemic is here to co-exist with us for the time being, till a vaccine or a long-term cure is found, brands will need to figure out ways and means to thrive in this new era and bring back consumers into the fold. Just merely adopting survival strategies will not ensure growth anymore. In fact, a multifarious, dynamic approach is required to claim leadership.
Much like other consumer electronics and automotive brands, smartphones will continue to be an experiential and sensory purchase. Avid engagement with consumers in offline and retail channels, much like the pre-Covid-19 days, will not be possible anymore. Hence brands will be looking at creating engaging digital journeys to hook the consumer’s attention. Through dedicated support communities online, hyper-personalised recommendations, virtual, interactive stores, and bespoke storytelling, a superlative digital engagement will have to be created from start to finish. Omni-channel shopping will also gain new prominence. We will see brands curating specially customised digital catalogues for consumers to surf from the comfort of their homes and having the chosen product delivered at their doorsteps.
From a product perspective, brands need to adapt to innovation faster and in a much more agile, nimble manner with a quick turnaround market strategy. Gone are the days when research teams were deployed on-field to gain consumer insights and a new blueprint was drawn up subsequently. By active social listening and mining insights on purchase habits, companies will know the changing pulse of the customers in real time. As I mentioned earlier, with purchases turning utilitarian, consumers will be focussing more on budget buys without compromising on features. In the smartphone industry, we will see this leading to a demand for more budget mid-range flagship smartphones with high-end specs. Which implies that more research and innovation has to be directed to bring down the cost of ownership while pushing the envelope in terms of quality. There are many other growth-oriented levers that a company can employ to thrive. Covid-19 has affected people deeply and projecting social responsibility in messaging is necessary. There will be a need to address your consumer’s concern, speak in their language, and meet them where they are. As a result, virtual launches could well be the new norm and we can see many more innovations to make them more exciting.
Smartphones will continue to play a crucial role in democratising technology, especially in a country like India, where millions of aspirational young buyers are fanning new trends. To capture this new spirit, it is imperative to spot the trend ahead and assume a vanguard position, rather than be a late entrant.
Views are personal. The author is vice president, realme, and CEO, realme India.