Smartphones sales have picked up pace in the past week in the run-up to Diwali, after a tepid start to the festive season, with brands offering heavy discounts and offers backed up by higher margins to retailers.
Sales surged nearly threefold week-on-week on Saturday, with footfall increasing about 30 per cent in major metros such as Delhi, Hyderabad, Mumbai and Kolkata, according to market trackers and retailers.
The first phase of festive season sales had seen a 3-4 per cent year-on-year decline in volume, even as value increased 8 per cent , according to Counterpoint Research. Retailers said sales started picking up in offline channel close to Dussehra and should peak just ahead of Diwali. Historically, offline retail has accounted for almost 60 per cent of sales around Diwali, according to market trackers.
This year, the industry is expecting a 60-65 per cent surge in festive season sales value compared to the regular sales period, a senior sales executive of a major smartphone firm said on condition of anonymity.
It comes on the back of a sharp increase in smartphone production by players like Dixon Technologies, which saw revenue double on account of a surge in production volume from its key customers including Xiaomi, Oppo and Motorola.
Ecommerce marketplaces such as Amazon and Flipkart are also offering deep discounts on high-end mobile phones, especially older models of Samsung and Apple.
A southern India-based distributor said mobile phone firms have increased their sales targets by around 40-50 per cent , offering an additional 1-2 per cent margins to retailers who are able to achieve the targets. Some firms are also offering extended warranties.
Demand for high-end handsets has pushed average selling prices up by Rs 1,000-23,000, the executive said, adding that premium smartphones from Samsung, Vivo and Apple are in high demand, while Xiaomi is seeing higher demand for its budget 5G smartphones.
“There’s optimism among retailers that sales will see better value this season due to premiumisation and attractive consumer offers from both brands and general retailers including lucky draws, freebies and cash discounts,” said Kailash Lakhyani, founder chairman, All India Mobile Retailers Association, which represents about 150,000 mobile phone retailers across the country.
Lakhayni, however, said that challenges persist, especially because of lower prices in online channels. “Thankfully, the affordability factors of longer instalment tenures and zero down payment are bringing more consumers into the market,” he said.
