Online sales of smartphones to dominate this festive season

As e-commerce resumes with the lifting of lockdown curbs, the online channel is expected to be the choice for consumers purchasing smartphones in times of Covid-19.

Experts predict smartphone sales via ecommerce platforms this festive season will capture more than half of the market and exceed offline sales for the first time, with consumers preferring home delivery to in-store shopping.

E-commerce channels including Amazon and Flipkart and the online stores of large-format retailers such as Croma, Vijay Sales, Reliance and Sangeetha could altogether corner 53% of the market during October-November this year, according to Counterpoint Technology Market Research.

The online market share could settle between 46%-50%, which would be the highest ever, International Data Corporation said.

According to IDC India data, online contribution to smartphone sales has consistently risen, touching 41.7% in 2019 from 38.4% in 2018. The highest share was recorded at 45.4% in the June-August period last year.

However, online smartphone sales are expected to come at a cost to some brick-and-mortar stores.

“Standalone retailers will be the most impacted if sales plunge in the offline channel as they are not very cash-rich entities and operate on periodic credit cycles, manage inventories and get incentives on target fulfilment,” said Tarun Pathak, associate director at Counterpoint.

However, the online-to-offline (O2O) model adopted by companies including Xiaomi and Vivo could save the day for independent sellers, analysts said.

“Offline retailers have pivoted their business models. With the O2O mechanism, they have adopted the hyperlocal delivery models. This could act as a shield to offline retailers to some extent,” Pathak said.

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In the O2O model, customers can get a phone delivered from their nearest retailer after placing an order on the handset maker’s official website.

“The hybrid channel strategy is the step in the right direction, given the current times, but its success largely depends on implementation,” said Upasana Joshi, associate research manager at IDC. “It depends on factors such as how many retailers actually digitise and how quickly they do it, and how comfortable customers are with browsing a single brand catalogue.”

While the online-offline tussle continues, online sales remained strong and captured 43.1% of the market in the January-March quarter, according to IDC.


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