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RUSSIAN MOBILE RETAIL REPORT Q1 2018

Thursday, May 10, 2018

Trend shows that online loans and installment payment option stimulate the sales of premium mobile handsets. For the first three months of 2018, Russians spent RUB 95 bln on smartphones.

 The growth of demand for digital entertainment in high quality such as movies in HD, 4K videos, online TV, the exchange of "heavy" files in instant messengers, as well as the ability to comfortably transfer the everyday tasks online, encourage users to purchase expensive smartphones. In the first quarter of 2018, the fastest growing category of smartphones bought were priced at RUB 30,000 - 40,000, sales increased 73% in unit terms and 94% in monetary terms.

 The high price of advanced smartphones stimulates the growth of demand for credit. The number of applications for the loan in the first quarter of 2018 increased by 2.5 times compared to the same period last year. More than 60% of devices priced at more than RUB 30,000 are sold on credit. The average cost of gadgets purchased through this financial instrument grew by almost 30% to RUB 22,000.

The rapid growth of demand for digital entertainment encourages customers to choose premium high-quality mobile devices that have large displays, powerful processors and high definition cameras. An advanced smartphone can provide users with a "single window" for entertainment, while assisting in solving everyday tasks. It easily replaces several devices - a TV set, a camera, an e-book, navigator and a bank card. Moreover, a modern smartphone becomes an alternative to traditionally costly formats of offline recreation such as going to the cinema or theater or stadium. Household tasks are also easier to solve with the help of a smartphone and different apps: payment of housing and communal services, public services, taxi, food delivery and much more - all these services are much more comfortable to use on a large screen of a high-quality smartphone.

The high cost of advanced smartphones is offset by attractive loan offers. With the most popular loan term - 24 months - the cost of a monthly payment for a modern device will be about RUB 1,500, equal to one family visit of the cinema. Customers can apply for credit to purchase mobile handsets directly on MTS’s online store website. After completing a small questionnaire with their request, customers receive a decision from the bank within one or two minutes. In Q1 2018, every fifth purchase was made using this financial instrument.

For many customers, buying on credit without overpayment is a useful service that allows them to distribute the financial burden of buying a new handset over a longer period of time. Additionally, many customers purchase smartphones on credit as a convenient way to boost their credit rating, which they may find useful in the future to buy a car or take out a mortgage.

Olga Filippova, Director of the Department of Online Sales at MTS Retail, commented: "At the beginning of 2018, we launched a new technological platform for the MTS online shop, which made online shopping more comfortable. We have significantly increased the website’s speed and robustness as well as expanded our logistics capabilities and improved our courier delivery service. We are continuing to develop our Big Data capabilities; and by offering our subscribers personalized device recommendations through the My MTS app, our online store will be able to triple its turnover from this channel.” 

The Russian smartphone market continues to grow rapidly in monetary terms – in Q1 2018 sales increased by 25.5% y-o-y. In total, this quarter, Russians bought 6.3 million smartphones for a total sum of RUB 95 bln. In unit terms, the market remained almost unchanged demonstrating an increase of 2.7% y-o-y. 

 Demand is growing across all price segments with the exception of lower-end devices – sales of smartphones priced below RUB 5,000 (mainly Chinese brands) declined by 15% y-o-y in unit terms and 27% y-o-y in monetary terms. Smartphones priced at RUB 30,000 - 40,000 demonstrated the most impressive growth – sales increased by 73% in unit terms and by 94% in monetary terms. As a result, the average price of a smartphone grew to RUB 15,325 (+23.2% y-o-y). Consumers continue to look for high-end devices produced by top brands. In MTS retail stores, sales of handsets in this price segment showed even more significant growth – the upsurge in sales was at 209% in unit terms and at 231% in monetary terms. The main driver for such growth was the sale of devices like the iPhone 7, iPhone 6S and the Samsung Galaxy A8. 

The most popular brands sold were Samsung, Apple and Huawei – together they accounted for roughly 70% (in monetary terms) of the overall smartphone market in Russia. Among these top 3 manufactures Huawei showed the fastest growth of 134.7%, while Apple and Samsung grew by 37.4% and 30.2% respectively. At the same time, sales of devices produced by other manufacturers dropped by 16.2%. 

According to MTS analysts, in March 2018, the Russian tablet market increased by 5% y-o-y for the first time after a constant consecutive decline over the last 15 quarters. This growth was attributable to the overall trend of consumers seeking more expensive and reliable devices that can provide easier access to digital entertainment services. While a year ago the average price of tablets that were sold was roughly RUB 6,000 (among the most popular devices were low-end brands such as Irbis, Lenovo and 4Good), in 2018, the average price amounted to RUB 10,000, an increase of 67%.

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MTS RESEARCH: M2M/IOT MARKET IN RUSSIA IS EVOLVING FROM SIM-CARDS TO BIG DATA

Friday, September 23, 2016

We are pleased to share with you a new report on M2M/IoT Market in Russia we produced using MTS’s proprietary data for H1 2016. The key highlihgts of the report are the following:

- Russian M2M/IoT market as of H1 2016 increased 33% from RUB 225 bln to RUB 300 bln year-over-year;

- Market growth has been driven by demand for Big Data solutions. Sales growth can be attributed mainly to devices and apps for analyzing big volumes of data (the share of which grew by 2 percentage points to 55%), software for data analytics (share growth of 1 percentage point to 27%) and to platforms for SIM-cards intellectual management (share growth of 3 percentage points to 20%). On the other hand, simple telematics solutions showed no growth and constituted 1% share in operators’ sales on M2M/IoT market;

- M2M SIM-card market in Russia grew in volume by 30% to 7.8 mln from 6 mln in the previous year. MTS’ share was 52%. MTS served 4 mln M2M SIM-cards by the end of H1 2016, an increase of 25% from H1 2015;

- Total revenue from IoT solutions increased by 1.7x, which reflects an increased contribution from service platforms and software, as well as from sales and maintenance of equipment carried out by MTS’s wholly owned subsidiary, NVision Group. LTE-based products show the highest growth, together with service platforms and software for data analytics from M2M gadgets; overall sales tripled last year;

- Traffic from telematics services on MTS LTE network by the end of H1 2016 increased by 1.6x from H1 2015; 3G-based solutions grew only by 7% and those using 2G-only network solutions decreased by 5%.

 

You can download the report below.

MTS M2M Report - H1 2016.pdf (888,92 kb)

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MTS RETAIL REPORT H1 2016

Thursday, July 07, 2016

We have recently released a report on MTS retail network in Russia for H1 2016. 

You can download the report by the link below.

H1_2016_Retail_report.pdf (322,48 kb)

REPORT ON DATA AND VAS USAGE IN B2B IN RUSSIA

Friday, May 20, 2016

We have issued a report on consumption of mobile internet and value-added services (VAS) by corporate users in Q1 2016, based on depersonalized big data analysis.

Highlights of the report:

- Connections to VAS in the small and medium business segment doubled in Q1 2016 compared to Q1 2015, whilst connections in the big business segment grew 1.5 times

- Two segments of the VAS market account for the greatest demand – these are services which help to boost sales (VAS services) and services which increase efficiency in business operations

- Big businesses have greater demand for cloud services and solutions for remote data storage and processing

- Consumption of mobile traffic by corporate users has doubled in Q1 2016 compared to Q1 2015

- The share of 4G traffic as part of total mobile traffic has tripled

You can download the complete report through this link: 

160520_Research on B2B data and VAS usage.pdf (732,40 kb)

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