The proliferation of mobile phones, especially smartphones, has provided a fillip to the demand for mobile accessories. Popularity of protective cases, power banks, earphones/headphones has grown tremendously in the last five years, with further growth expected in the future.
Smartphone sales have been robust in the developing countries, as unlike in the west, the market has not reached saturation point there. Many consumers in developing countries are yet to buy their first smartphone, and this presents a wonderful opportunity for stakeholders in the mobile phone accessories market.
In terms of market value, the global mobile phone accessories market is expected to reach US$ 121.7 Bn by 2025. A key part of the revenue sales are expected to come from Asia Pacific, where multinational brands, such as Samsung, Apple, and Sony are competing with regional players for market dominance.
Emerging nations of Brazil, China, India, and Indonesia, have a strong presence of local players that are offering high-end smartphones at competitive prices. Xiaomi and Micromax, two leading mobile phone brands in China and India respectively, are giving multinational brands a run for their money. What they are also doing is presenting opportunities for mobile phone accessory companies to expand their product offerings. The key reason for this being that in a bid to keep prices disruptive, these regional players do not provide too many accessories ‘in the box’ to consumers. Further, in many cases, the accessories provided are standard versions, which in turn, is creating demand for mobile accessories.
Multi-brand, Single Store, and Online Store: Key Distribution Channels
The key distribution channels for mobile phone accessories include multi-brand stores, single stores, and online stores. Growth in the retail segment has also provided an impetus to the development of multi-brand stores. Globally, multi-brand stores accounted for a market share of nearly 44% in 2014.
One of the key reasons for the popularity of multi-brand stores as a prominent distribution channels is the diverse range of available accessories. Consumers have the option of buying both ‘standard’, as well as third-party accessories. Colourful protective cases with images of football clubs, famous celebrities, cartoon characters and superheroes, have become a favourite among mobile phone owners, and as most of these accessories are available in multi-brand stores, this distribution channel has gained prominence in the market. It is expected that multi-brand stores will continue to be the most dominant distribution channel in the global mobile accessories market, accounting for a market share of nearly 41% by 2025.
Single stores that house official mobile phone accessories are the second-most dominant distribution channel currently, however, limited range of offerings, combined with offers and discounts on e-commerce sites is expected to cause a market share decline in the next decade. The single store segment of the global mobile phone accessories market is expected to lose 320 BPS in the next decade.
Online: The Future of Commerce
E-commerce has transformed the manner in which we shop, and this trend is also visible in the mobile phone accessories market. Accessories on popular e-commerce sites are available at a fraction of price of multi-brand or single stores, luring consumers into buying accessories online.
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Convenience and quick doorstep delivery are other key factors why online stores are gaining traction as a key distribution channel in the global mobile phone accessories market. Majority of online stores offer delivery within a couple of days, with a hassle-free returns policy, giving consumers the confidence to shop without being too bothered. Owing to these features, the online segment of the global mobile phone accessory market is expected to account for nearly 32% of market value share by 2025.
As the insatiable demand for smartphones and related accessories grows, key stakeholders in this market are looking at tapping into emerging markets, as it is expected that emerging nations will witness the second way of smartphone frenzy in the near future.
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Mr. Sudip Saha