Step into a metro or a train in a big city and there is a good chance that you will spot someone with a fitness band. Just as there is a good chance of spotting at least one person on a given day sporting an Apple watch or a Moto 360. In India, wearables are becoming more visible though their sales are marginal compared to smartphones.
According to an International Data Corporation (IDC) report, almost 400,000 wearables were sold in India in the first quarter of 2016. And, with an attractive ₹999 price tag, Xiaomi's Mi Band was the biggest seller. Mi Band's success is also indicative of the fact that fitness bands are the Indian consumer's gateway to the wearable space. In fact, 87.7 percent of the wearables sold in India were fitness bands, and Xiaomi cornered 27.1 percent of that market.
The second and third spots were also taken by the fitness band companies. The Indian company, GoQii, secured the second spot with an 18.1 percent market share. The third spot went to the world leader in wearables, FitBit, with a 6.1 percent market share. FitBit is launching more wearables in India, offering solid competition to Mi Band and other basic fitness band makers.
Smartwatches in the meantime, have also made a little bit of impact. Samsung has a 2.5 percent market share, thanks to the January launch of their very good looking smartwatch, Gear 2. Even though the price was a bit on higher side, the watch sold well. Makers of one of the most adored smartwatches, Moto 360, claimed a market share of 1.6 percent.
While fitness bands, with their lower prices, are likely to find a healthy market in India, smartwatches will probably remain a niche market for some time, catering mainly to geeks and enthusiasts.
There are other hurdles in the way of greater smartwatch penetration of the Indian market. There is no Samsung Pay or Apple Pay in India -- payment services that enable you to use your phone or smartwatch as a credit card -- making that function of the smartwatch redundant here. Nor does India have the music streaming service, Spotify, which can be linked to many wearables. So smartwatch use here is limited to basic notification interaction and call handling.
Also, most smartwatches are priced above the ₹15000 mark, the amount that an average user pays for their smartphone. Few are likely to shell out that kind of money for a rather underwhelming experience.
"The popularity of wearable devices is restricted to urban sectors with a relatively higher disposable income. Since online platforms are immensely popular in this segment, nearly three-quarter of the sales happened through leading online retailers. However, to expand the reach, an increasing number of brands are taking up the offline channel, especially through major large format retail (LFR) outlets," said Nimesh Raj an analyst from IDC.
The wearable sector saw a triple digit annual growth in 2015 and it is expected to continue on that path. Cheap fitness bands such as Intex's FitRist and Xiaomi's Mi 2 which should be launched in India this year, should give a big push to the sector.