Amazon targets double-digit growth in consumer electronics, driven by tier 2 and tier 3 cities

Over 65% of Amazon’s consumer electronics demand comes from tier 2 and tier 3 cities.

E-commerce giant Amazon is targeting strong double-digit growth in its consumer electronics category in 2025, driven by rising demand from tier 2 and tier 3 cities. As the company wraps up the first quarter of the year, it has seen a strong start, with robust performance across key electronics segments, including 5G smartphones, AI-PC laptops, and major appliances like TVs, washing machines and air conditioners.

Amazon is also fine-tuning its quick commerce service, Amazon Now, which was recently launched in Bangalore, and plans to use it to sell consumer electronics.

"We had a good quarter and are quite happy with how the year started for us. Consumer electronics, including mobiles, PCs, audio devices, and major appliances, have seen strong double-digit growth, and we are pleased with this momentum," Zeba Khan, Director of Consumer Electronics, Amazon India, told Moneycontrol.

According to Khan, this growth is particularly significant because a large portion of it is coming from tier 2 and tier 3 cities. "Our mission is to democratize technology, making it accessible and affordable down to the last pin code in India. We are thrilled to see this reflected in the growing demand from smaller cities," she said.

Over 65% of Amazon’s consumer electronics demand comes from tier 2 and tier 3 cities, with mobile phones accounting for an even higher share — up to 70%. This trend highlights the increasing digital adoption in smaller towns, where affordability, accessibility, and product variety are key growth drivers.

The company is also targeting strong double-digit growth in its smartphone business in 2025, driven by the affordability of sub-Rs 10,000 5G smartphones. "5G is trending, and for sub-Rs 10,000 5G phones, we have seen almost 10x growth since January compared to last year," Khan noted.

According to Counterpoint Research, India’s smartphone market saw just 1% year-on-year growth in 2024, reaching 153 million units shipped.

While smartphones remain the dominant category in terms of revenue contribution, Khan said tablets and laptops are also experiencing growth on Amazon. "Laptops are growing with the availability of AI-powered PCs, but tablet sales are increasing even faster—over 20% compared to last year."

Amazon is also witnessing a premiumization trend, with consumers upgrading their smartphones and appliances to higher-end products.

"Even for washing machines, premiumization is happening. Front-load models of 9 kg and above are growing 2X. These are premium, high capacity washing machines. Similarly, consumers are opting for 43-inch and larger TVs. In the AC segment, energy-efficient 5-star rated models are in high demand, with the category growing by 35%, while other major appliances are growing by 25%. Growth has been broad-based in the first quarter," Khan said

Affordability schemes are further fueling this shift toward premium products. "People are embracing affordability options, and this trend is not limited to metro cities. In the premium segment, no-cost EMI penetration is upwards of 30%," she said, adding that Amazon is ensuring broader availability of affordability options through its financial partners.

More than half of Amazon’s electronics sales come from Prime customers. For Prime members, Amazon delivered nearly 1 million products on the same day and over 4 million the next day. "We are further speeding up our deliveries," Khan added.

Amazon is also fine-tuning its quick commerce service, Amazon Now, which was recently launched in select pin codes in Bangalore.

"...Quick commerce is a service that customers in India like. We will focus on delivering the best possible experience. At Amazon, we stand for a broader selection in the consumer electronics category," she said.