The Russian market of wearable gadgets showed negative dynamics for the first time. In the first quarter, it decreased by 4% in volume terms. This was the result of a decrease in citizens’ interest in fitness trackers, sales of which fell by 21%. Instead, consumers began to choose more functional smart watches, whose sales, on the contrary, grew by 14%. Experts note that one of the significant reasons for such purchases was the expectation of a protracted shortage and rising prices after the outbreak of hostilities in Ukraine.
Kommersant got acquainted with the MTS report on sales of wearable devices – smart watches and fitness bracelets – for the first quarter of 2022. According to the company, during this period the market decreased in physical terms by 4% year-on-year. In total, in January-March, more than 1.1 million wearable gadgets were sold for 12.6 billion rubles. In monetary terms, the market increased by 10%.
Decrease in sales in pieces was recorded for the first time – earlier this segment was constantly growing, they say in MTS. Fitness bracelets showed the largest drop: in the first quarter, Russians bought them 21% less than a year earlier. In monetary terms, demand decreased by 1%. In total, in January-March 2022, 480 thousand fitness bracelets were purchased for 1.3 billion rubles.
“Fitness bracelets are going out of fashion – instead of them, buyers began to choose more functional smart watches with large displays, from which it is more convenient to read information,” MTS notes.
In January-March, Russians purchased almost 700,000 smartwatches for 11.3 billion rubles, which is 14% more than in January-March 2021 in physical terms and 13% more in money terms. The average cost of smart watches was more than 16 thousand rubles, bracelets – about 2.7 thousand rubles.
Among the most popular manufacturers of wearable devices among users, MTS analysts single out Apple with a market share of 29%, Samsung (11%), Huawei (10%), Amazfit (8%) and Xiaomi (7%). At the same time, Apple and Samsung stopped deliveries of products to Russia due to military operations in Ukraine.
M.Video-Eldorado confirms the decline in demand for wearable devices: “This was affected both by the supply limitation of smart watches themselves and flagship smartphones, with which wearable devices are most often purchased.”
In the first quarter, many people decided to buy smartwatches due to the alleged long-term shortage of devices of some brands and rising prices for them, says Mikhail Dogadin, Vice President for Procurement and Development of Svyaznoy:
“But in general, the wearables market sank due to a serious decline in demand for fitness bracelets, which in recent years have provided stable sales growth not only for the category, but also for the market as a whole.”
Citilink also drew attention to the decline in demand for fitness bracelets: “These devices have less functionality compared to smart watches, but they are cheaper. The change in cost against the backdrop of currency fluctuations for low-cost devices had a stronger impact on demand.”
Now a significant share of the smartwatch market is occupied by Chinese vendors, but Russian electronics manufacturers are also gradually mastering this area: in October 2021, the Ruselectronics holding (part of Rostec Group) announced the development of tracker bracelets based on the Internet of Things technology. The devices are designed for searching, as well as remote supervision of children or the elderly. The bracelets use LoRaWAN technology (wireless transmission of small amounts of data), it does not require SIM cards and cellular networks, while providing coordinates. As representatives of the holding told Kommersant, a pilot batch of devices has already been released and tested.
The decrease in sales of wearable gadgets is due to the current difficulties with the supply of electronics, including due to problems with logistics, which directly affects the cost of the final product, Alexander Zaverzaev, adviser to the president of Mercator Holding on digitalization, notes. In his opinion, the situation is at the same time favorable for the development of own technologies: “There are already domestic solutions using only 20% of imported electronic components.” But in the short term, the expert admits, there will be no quick replacement of imported devices.