Indian start-up beats big firms in wearable battle

GOQii wearable band
GOQii, a health care start-up, has grabbed the number one position in the wearables segment for the second quarter of calendar year (CY) 2016 with 16.1 per cent market share, leaving China's Xiaomi behind, the latest release from International Data Corporation (IDC) said.

The gain in GOQii's market share is being attributed to its unique selling point, where a vendor provides access to a personal trainer. GOQii has partnerships with diagnostic centres and doctors. Unlike other brands, GOQii has a relatively higher share in the commercial segment, than in the consumer segment, IDC said.

Xiaomi slipped down one position to number two, with 10.3 per cent market share. Apart from competitors launching products with displays in the same price band, consumers also delayed their purchase as the market awaits the launch of Mi Band 2, IDC said.

The wearables market in India observed a robust growth of 41.9 per cent in Q2 2016 over the first quarter of 2016. According to IDC's Worldwide Quarterly Wearable Device Tracker, total shipments in Q2 2016 clocked over 567,000 units of which basic wearables, defined as wearables which can't run third-party applications, contributed nearly 94 per cent.

According to Raj Nimesh, senior market analyst, Client Devices, IDC, "The wearables market has advanced to a stage where awareness is no more a roadblock. New vendors are continuously entering the market and existing vendors are offering better product features. Though basic devices marked a sharp growth, the average price of over $190 has had a negative impact on smart wearables as it is still perceived as a premium device which not many consumers can afford."

IDC sees no drop in growth rate in this segment. "With festive season round the corner, most of the e-commerce companies are betting big on wearable devices. Considering the wide range of price points, wearable devices are expected to be the first choice for gifting purposes. Bundling with mobile phones during festive season might give further push to the demand," said Pranav Tripathi, senior research manager, IDC

The wearables market has advanced to a stage where consumers are looking for better product features and companies are increasingly working on solving their concerns. “Short battery life, low accuracy, limited product features were some of the major concerns that consumers had, however the new generation of devices are coming up with better technology to address the consumer issues, not just in basic but also in smart wearables,” Tripathi said.

Though the market witnessed huge growth in basic wearables, the future of smart wearables is dependent on price. With the expected launch of smart watches at lower price point towards the end of the year, the smart segment of devices could observe a shift to a growth path. The market in India is still at a nascent stage and is expected to evolve in all form factors.

In terms of price, the market was highly dominated by the sub-$50 category with over 83 per cent share. The category largely caters to fitness bands from Intex, GOQii and Mi. "Most of the low-end devices suffice the basic requirement that consumers look for at this stage, largely for first experience and gifting purpose. As the market evolves and consumers demand advanced features, a shift to higher price bands is expected," Nimesh said.

The e-commerce channel remains the most preferred route for consumers. Most of the new entrants are taking the e-commerce route as it is cost effective with direct reach to the end-consumer. "Of the total shipments, online channels contributed 79.2 per cent and a shift in channel preference does not seem to be in sight. The offline channel is generally preferred for premium products where the consumer wants to have real-time experience before buying the product. However, as long as low-end products drive the market, e-commerce platforms are expected to dominate the channel," Nimesh said.

Besides GOQii and Xiaomi, Fitbit maintained the third spot with 6.7 per cent market share. The brand, however, increased its market share both in terms of units as well as value. The brand now holds almost a quarter share in terms of value, leading by over 15 per cent of its closest competitor.

Garmin made an entry to the top 5 bracket with a 1.4 per cent share, marking a remarkable sequential growth of 250 per cent over Q1 2016. "Garmin products are applauded for high technical specifications and have a wide range catering to different consumer segments. Despite low share in terms of units, the brand was second in value market share," said IDC.

Huawei was another new entrant to the top five bracket, with one per cent market share. It is one the few brands with a presence in both basic and smart wearables. Though growth was seen in basic wearables, a drop was observed in smart wearables over Q1 2016.

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