India's Wearable Device Market Struggles Amid Festive Quarter Decline

The Indian wearable device market experienced a notable downturn in the third quarter of 2024, despite the traditionally strong consumer spending during the festive season. According to the latest report from IDC, shipments of wearable devices fell by 20.7% year-over-year, totaling 38 million units. This marks the second consecutive quarterly decline for the sector, signaling broader challenges in an otherwise thriving consumer technology market. In this context, several trends and shifts in the market demand and brand strategies emerge, offering important insights into the future of India’s wearable device industry.

Market Overview: A Downturn Despite Discounts

The wearable device market in India faced its most significant contraction in recent years during the crucial festive quarter. While aggressive discounts were offered to stimulate demand, the sector still recorded a sharp decline in shipments, falling by 20.7% compared to the same period last year. This downward trajectory reflects ongoing struggles within key segments, particularly smartwatches.

The smartwatch market, which had been a driving force behind the growth of wearables in the region, took the hardest hit. Shipments in this category plummeted by 44.8%, amounting to only 9.3 million units. Despite this, a slight positive note emerged: the average selling price (ASP) for wearables rose by 1.3%, marking the first increase since Q2 2019. This suggests a shift toward premium devices, even as the overall market contracted.

Brand Performances: Winners and Losers

Noise, a brand that has long held its ground in India’s wearable market, continued to lead in the smartwatch category, even amid the broader market slowdown. The company’s success can be attributed to its strong brand presence and consistent focus on innovation, according to its co-founder Amit Khatri. Despite the general decline, Noise has managed to grow its market share and maintain a steady year-on-year increase in average selling prices.

On the other hand, Boat, another significant player in the Indian wearable market, adopted an aggressive inventory-clearance strategy during the festive season. While it helped Boat move inventory, the overall market still faced significant challenges. Notably, Boult and realme emerged as the few brands that managed to buck the downward trend, registering impressive growth rates of 32.5% and 56.5%, respectively.

TWS and Earwear: A Resilient Segment

While the smartwatch market faced a sharp decline, the earwear segment, particularly Truly Wireless Stereo (TWS) devices, showed more resilience. Although still experiencing a 7.5% year-over-year decline, the TWS category reached a record high, securing 73.2% of the total earwear market share. Boult and realme also stood out in this segment, posting substantial growth rates of 55.0% and 94.6% respectively.

Smartphone brand Nothing also made significant strides, recording an impressive 308.2% growth in the wearable market as a whole, underscoring the growing importance of brand diversification in the wearable ecosystem.

Emerging Smart Ring Segment

A small but notable emerging category within wearables is the smart ring. With over 92,000 units shipped in Q3 2024, the smart ring market is slowly gaining traction. Ultrahuman emerged as the leader in this category, capturing 36.8% of the market share, followed by boAt and Pi Ring at 20.5% and 16.3%, respectively. Despite a year-over-year price drop of 16.2%, the segment’s growth signals a potential shift in consumer preferences toward more compact, functional wearable devices.

Offline vs. Online Sales Dynamics

One of the most intriguing findings from the IDC report is the shift in channel dynamics. While online sales continued to dominate the smartwatch market, accounting for 63.8% of the total share, offline channels gained ground in the earwear segment, growing by 9.4% year-over-year. This indicates a broader trend where consumers, particularly for certain product categories like earwear, may be more inclined to purchase from physical stores as they seek to try out the products before making a purchase.

Looking Ahead: What to Expect in 2025

The outlook for 2025 remains cautious, particularly in the smartwatch market. IDC analysts predict that growth will likely remain flat or even experience a slight decline. However, there is hope for the future as early trends show a shift toward more advanced smartwatches. Consumers are increasingly seeking wearables with sophisticated health tracking features and more advanced functionalities, signaling a potential recovery or at least stabilization for the segment.

What Undercode Says:

The decline in India’s wearable device market, especially in the smartwatch segment, highlights a crucial point about consumer technology trends. The drop in shipments may seem worrying, but it is important to understand the factors behind this contraction. The market is transitioning, with consumers becoming more selective, demanding premium devices with advanced features.

While Noise has managed to retain its leadership position in the smartwatch category, its success is rooted in its ability to continuously innovate and meet evolving consumer expectations. The company’s ability to sustain growth while focusing on the premiumization of its products demonstrates a crucial shift in the industry. In a market where consumer preferences are rapidly evolving, Noise’s success can serve as a model for other brands looking to thrive during periods of market stagnation.

The earwear market, particularly the TWS category, appears more resilient in the face of overall market decline. With TWS products now dominating the earwear segment, brands like Boult and realme are carving out significant niches in a competitive space. The shift towards high-quality, wireless audio solutions is a clear trend that brands should not overlook, as it continues to grow despite the challenges faced in other wearable categories.

The emergence of the smart ring category also reveals how consumers are gravitating toward more specialized and compact wearables. While the market is still in its infancy, the rapid growth of brands like Ultrahuman signals an intriguing future for wearables beyond just smartwatches and earwear.

Looking toward 2025, the wearable market will likely continue to evolve, with an increasing focus on advanced health tracking and functionality. The market will also need to find ways to balance innovation with affordability, particularly in the smartwatch segment, which faces a potential slow down.

Fact Checker Results:

The wearable device market in India saw a 20.7% YoY decline in Q3 2024, reaching 38 million units.
The smartwatch market, particularly, experienced a steep decline of 44.8% YoY.
TWS earwear products now account for a record 73.2% share of the earwear category.