No more online-centric smartphone brands in India

Background

India’s smartphone market was once defined by a clear divide: online-first brands chased quick scale and lean costs, while offline players focused on trust and deeper regional reach.

Over the last five to six quarters, the market has realigned. Online shipments are now largely seasonal, peaking around Republic Day, Monsoon Deals, or Diwali, while offline channels deliver more stable volumes throughout the year. Consumer habits are maturing, and many still browse online but prefer the confidence of an in-store experience before committing.

A recent Canalys consumer study underscores this shift. Replacement buyers (now most smartphone customers) are skewing offline, while upgrade-driven buyers still favor e-commerce. With the replacement cycle stretching and consumption maturing, offline is rising.

This offline momentum is being led to India’s broader premiumization narrative. According to Canalys (part of Omdia), offline ASPs rose from US$196 in Q1 2022 to US$303 in Q1 2025, while online ASPs grew more modestly from US$199 to US$246. This reflects that offline consumers are increasingly driving higher-value sales, drawn by in-store experience, hands-on evaluation, flexible financing, and stronger after-sales service. Brands including Xiaomi, realme, POCO, OnePlus, and Motorola—initially online-centric—are leaning heavily on offline expansion to reach new customers and boost ASPs.

• Xiaomi (Redmi and Xiaomi) raised offline contributions to 66% in 2024 from 38% in 2022, supported by aggressive mainline pricing for the Note 13 series.
• realme grew its offline share to 51% in 2024 (up from 34% in 2022), with strong retail traction for its GT and Number series.
• Motorola’s offline share touched 25% in 2024, driven by its Edge and Razr series, products that benefit from hands-on demonstration.
• POCO and OnePlus scaled via JioMart Digital’s 100,000+ retail outlet network, extending reach into Tier four and five cities where e-commerce is weak.

Why offline remains the primary channel going forward

• Bridging price gaps with the channel and offering similar promotional offers: Offline retailers have historically been affected by deep discounts offered by online platforms, which gave an edge to online-centric brands. However, brands now ensure more pricing parity and synchronized promotional offers across online and offline channels. This restores trust among offline retailers, ensures consistent consumer messaging, and builds brand equity beyond flash sales.
• Government push to build a competitive retail structure in India: India’s push for GST compliance, retail digitization, and grey market crackdowns has accelerated formal offline retail adoption. This environment not only supports small businesses but also protects consumers from fraud. Many online buyers have reported receiving pre-activated or tampered smartphones from unauthorized resellers. In contrast, offline stores are typically managed by brands under various channel programs as Authorized Resellers. This helps ensure verified IMEIs, full warranty coverage, and physical accountability, restoring consumer trust in the purchase experience.
• Financing access and distribution in Tier three to five towns: Financing remains offline-dominated outside metros, where local NBFCs and fintech partners power EMI schemes critical to premium adoption. POCO scaled its footprint using hybrid mobile-kirana (mom-and-pop) distribution models. vivo and Samsung have embedded dealer-led EMI options and loyalty rewards to expand their reach beyond urban centers. Crucially, financing services are easier to explain and convert in-person, with trained sales staff available to clarify terms, eligibility, and repayment structures, building buyer confidence at the point of sale.
• Ecosystem storytelling needs physical touchpoints: Major Android brands invest in broader ecosystems—smartwatches, earbuds, tablets, and smart TVs—and offline stores allow them to demonstrate these interconnected products. The network effect from ecosystem stickiness is better realized when consumers experience it firsthand. This in-store engagement helps brands promote a premium perception and increase multi-device ownership among loyal users.
• Experience-led selling is central to premium growth: With ASPs nearing US$280, replacement buyers seek in-store reassurance, making offline retail essential. Hands-on demos help decode AI-led features such as live translation or camera optimization. Foldables and design-first phones benefit from physical trials. Brands including Motorola saw better traction for Edge and Razr post-retail rollout, while vivo and OPPO have hosted AI photo workshops. Samsung’s “Learn at Samsung” sessions also enable first-hand exploration of Galaxy AI.

A recalibrated playbook for growth

The growth of offline channels in India’s smartphone market underscores the need for vendors to move beyond treating online and offline as competing silos. In reality, the two are deeply interconnected. Devices subsidized online often resurface in offline stores, while pre-activated units intended for offline schemes frequently reappear on digital platforms via unauthorized resellers. This blurring of boundaries leads to misaligned incentives, channel conflict, and consumer confusion.

Creating harmony between these channels requires vendors to embrace the whole customer journey, recognizing that shoppers often move fluidly between online browsing, offline demos, and hybrid fulfillment. Omnichannel strategies that align operations, incentives, and reporting across both channels will unlock win-win outcomes, but execution is challenging.

Vendors should refine their approach to classifying online and offline sell-in, sell-through, and sell-out to better reflect operational realities and support channel harmony. With online and offline sales increasingly intertwined, major retailers are implementing structured frameworks to clarify how hybrid transactions are attributed. These efforts aim to align stock allocation, sales credit, and team incentives more accurately across channels.

By adopting similar frameworks, vendors will reduce friction between their direct-to-consumer (D2C) online strategies and their open channel partners. This also supports a more accurate picture of channel performance, enabling smarter inventory allocation, incentive structuring, and partnership planning. In markets such as India, where omnichannel behaviors are accelerating, clear and consistent sales attribution is essential to avoid internal competition and to foster a more collaborative, sustainable growth model across all touchpoints.