At a time when brick and mortar retailers under the Confederation of All India Traders (CAIT) announced plans for a nationwide agitation against predatory pricing by ecommerce players on Monday, the share of online channel in smartphone sales touched record highs in July-September.
Global research firm IDC said that “continued aggression by online platforms with attractive cashback and buyback offers” helped take the online channel share to a record high of 45.4% with a year-on-year growth of 28.3%.
Navkendar Singh, research director – client devices, IDC India, said though the offline channel remains the largest channel for smartphones in India, “the unabated aggression of the online players will continue to be a challenge for the offline channel.”
In the July-September period, offline channel saw a 2.6% year-on-year decline in shipments, as per IDC. Consumer enquiries and footfall were also relatively slow at the retail counters through September, compared to the previous years,Singhsaid, adding that they would be marginally higher in October- the festival month.
Counterpoint Research, a firm that tracks phone shipments, said that online smartphone sales share will hit record high of around 41% by end of 2019- up from 32% back in 2016. Tarun Pathak, associate director, Counterpoint believes the larger onusison smartphone makersto play the balancing act in the issue. “The online medium offers a faster go-tomarket route for OEMs with their latest models, but brands have started to adopt multi-channel strategies.”
Arvinder Khurana, national president, All India Mobile Retailers Asssociation (AIMRA), said despite all regulations in place, online platforms sold smartphones at prices much lower than even the buying price for retailers this festive season.
Having approached both the commerce minister Piyush Goyal and smartphone OEMs for solutions, Khurana says online-exclusive tieups of smartphone makers with ecommerce marketplaces have hurt the offline industry badly. “The smartphone industry has grown by 15-20% year-on-year in the past few years but offline mobile trade has declined at the same rate in the period,” Khurana says.
Smartphone makers Vivo, Oppo and Xiaomi told TOI they remain committed to providing multiple touchpoints for their consumers and give equal importance to online and offline distribution channels. However, many other brands have not made any official statement to this regard.
“As we get ready to embark on the 2020 journey, we will continue to have the right balance between online and offline,” Nipun Marya, director – brand strategy, Vivo India, said.
Xiaomi says the online channel contributes to about 60% of their smartphone business, they are on track to achieve a 50:50 ratio by early next year.―Times of India