Saudi Arabian demand for value smartphones drives online sales

InnJoo began selling at a price point of Dh299 in September exclusively through the online market place. Courtesy InnJoo

Growing demand for value smartphones in Saudi Arabia is driving sales at online retailer souq.com.

Six months after its entrance into the region, InnJoo, the Chinese maker of affordable smartphones, said it expects to have sold 400,000 units by the end of this month and that 50 per cent of its sales have come from Saudi Arabia.

InnJoo began selling at a price point of Dh299 in September exclusively through the online market place, and the brand now accounts for 30 per cent of sales in the 5-inch 4G or LTE device category on the souq.com site which also includes the Apple iPhone 5 – the most popular smartphone in the UAE in the third quarter of last year.

Souq.com, which offers more than 300 different makes and models of smartphones, said it hopes to sell more than 100,000 InnJoo units a month, ahead of the launch of the new One model at the end of this month. It will retail for Dh499 or Dh599 depending on its 4G capability compared with about Dh1,899 for the iPhone 5S.

Customers in Saudi and Egypt are more price conscious than those in the UAE, said Ronaldo Mouchawar, the co-founder and chief executive of souq.com.

“There are an increasing number of competitors at the value end of the smartphone spectrum looking to to turn feature phone users to smartphones,” he said.

Saudi Arabian customers are buying four times as many InnJoo phones as those in the UAE, according to souq.com.

Rising competition in emerging markets is expected to take 25 per cent of Samsung’s share of the global smartphone market by the end of this year as lower-priced devices grow in popularity, according to Fitch Ratings. Apple’s market share is also forecast to decline, by 14 per cent, as China’s Xiaomi, Lenovo, and Huawei, as well as India’s Micromax, sell more handsets.

They are increasingly focused on emerging markets with Xiaomi saying on Thursday it would begin local production in India.

InnJoo, which plans to sell a total of 1 million devices in the Middle East and Africa this year, uses its own proprietary software, including a browser and application marketplace, to customise its products to the wants and needs of its customers. The One is the fourth incarnation in just nine months.

“We take feedback from all users,” said Robert Liang, managing director of InnJoo. “We localise and improve every detail from hardware to software based on it.”

According to Google’s consumer barometer for 2014, 82 per cent of Saudi Arabia’s online consumers used their smartphones as the medium of choice, whereas in the UAE 53 per cent of internet shoppers used their phones for transactions.

“In 2013 we only saw 13 per cent of traffic to souq.com come from smartphones,” said Mr Mouchawar. “In 2014 that had jumped to 65 per cent of traffic. Online sales are still only 1 per cent of the retail spend in the region but it is growing quickly and the smartphone penetration is increasing the traffic and the ease of buying exponentially.”

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