Indian wearable brands face exit amid low margins, Chinese resurgence; active brands decline by 30% in Q3

smartwatch

The number of active brands in India’s wearable market, encompassing smartwatches and audio wearables, dropped by over 30 percent year on year in Q3 (July-September) CY2024, leaving just 52 brands operating, and more domestic brands are expected to exit the market soon.

This decline comes as the market faces a slowdown due to factors like a prolonged replacement cycle, limited innovation in budget-friendly devices, lack of differentiation, and a cluttered product portfolio.

Analysts attribute the trend to falling demand and razor-thin profit margins, which are pushing Indian brands—often reliant on white-labelled devices from China—out of the market. In parallel, Chinese smartphone brands are re-entering the space, leveraging the premiumisation trend and their established ecosystems to gain traction.

Shift in consumer preferences

“The wearable market is shrinking as the replacement cycle slows, driven by a lack of innovation and differentiation in affordable models. A confusing product portfolio has also left consumers dissatisfied, particularly after their first smartwatch purchase,” Anshika Jain, senior research analyst at market tracker agency Counterpoint Research , told Moneycontrol. She noted that active brands dropped by over 30 percent year on year (YoY) in Q3 2024.

Vikas Sharma, senior analyst at market research firm IDC, added that while major players continue to dominate, smaller brands are exiting as demand contracts. “Last year’s festive season saw significant shipments of white-label smartwatches, but this trend has reduced in 2024 due to shrinking demand.”

The Indian wearable market saw a significant growth from 2020, driven by affordable products and feature enhancements. However, it saw its first decline in Q2 of 2024, which continued into Q3 due to demand fatigue, limited product innovation, and high inventory levels across sales channels.

IDC said that 38 million wearable devices were sold in the July-September period, down 20.7 percent from the corresponding period the previous year. This was due to fewer product launches and cautious inventory management during the festival season.

For the first time since the second quarter of 2019, the average selling price (ASP) of wearables increased, rising 1.3 percent to $21.3 (around Rs 1,800) in Q3 of 2024.

Noise (Nexxbase) maintained its lead in the smartwatch segment, while boAt (Imagine Marketing) focused on clearing inventory during the festive sales. Among the top five brands, Boult and Realme were the only ones to record growth, with an increase of 32.5 percent and 56.5 percent, respectively.

In the TWS or audio market, Boult and Realme saw strong growth of 55 percent and 94.6 percent. Smartphone brand Nothing made significant strides, growing by 308.2 percent YoY in the overall wearables market.

According to IDC, smartwatch shipments from lesser-known brands, which sell multiple white-labeled products, fell by 59.1 percent in the quarter ending September 30 after experiencing nearly three-fold growth the previous year.

Mass market challenges for Indian brands

Faisal Kawoosa, Chief Analyst at TechArc, noted that many Indian brands targeted the mass market but failed to deliver value. “Inferior quality, inaccurate tracking, and short battery life were common issues. Consumers soon pushed back, unwilling to settle for ‘crap-tech’ wearables,” he said.

Kawoosa emphasised that Indian consumers are willing to spend more for quality and reliability, a trend reflected in the premium segment’s growth, led by brands like Apple and Samsung. “Consumers are now prioritising better health insights, improved sensors, and after-sales service, which premium brands are delivering,” he added.

Resurgence of Chinese brands 

Chinese handset makers, including Xiaomi, Oppo, Vivo, Realme, and OnePlus, are aggressively targeting India’s wearables market with higher-priced but better-quality products. Analysts attribute their success to strong ecosystems and diversified revenue streams beyond smartphones.

“Chinese brands leverage their smartphone-plus strategy to grow their non-smartphone revenue streams. Their better control over ecosystems allows them to offer superior quality products compared to Indian brands,” said Kawoosa.

Despite the Chinese resurgence, Indian vendors still dominate with a 70-75 percent market share, compared to 15-20 percent for Chinese brands, according to IDC.

Chinese brand Realme and India’s Boult were the only wearable brands in the past quarter to register strong growth among the top five, which include Oppo, as per IDC.

“Chinese brands have expanded their portfolios with offerings across multiple price points, but India-based vendors remain dominant,” said IDC's Sharma.

In the third quarter of 2024, Xiaomi and Realme achieved strong sales volumes. Realme made a comeback in the market after a significant hiatus, launching new smartwatch and audio products. According to Counterpoint, Xiaomi saw over 100 percent YoY shipment growth during this period.

What the future holds

Analysts predict the market will begin recovering by 2027 as both Indian and Chinese brands introduce better sensors, invest in user experience (UI/UX), and incorporate AI features into smartwatches.

According to IDC estimates, smartwatch shipments are expected to decline further to 30-35 million in 2025, compared to 34-36 million units in 2024. Earwear or TWS audio shipments will, however, increase to 85-88 million in 2025 from 80-82 million in 2024.

"Limited product launches and high inventory across channels led to this decline. In 2025, brands need to focus on innovation, with advanced feature sets to generate more demand for smartwatches," Sharma said. The overall market will remain flat or decline marginally in 2025, he added.

“The next wave of growth will focus on advanced features to cater to upgraders while also maintaining affordability for first-time buyers,” Jain said. Enhanced innovation and better value propositions are expected to drive the market forward, improving both consumer trust and demand.