Smartphone companies are likely to slash their marketing expenditure by up to 70% as footfalls disappear in brick-and-mortar stores and orders slide on ecommerce sites due to the Covid-19 pandemic, market experts said.Smartphone sales are predicted to plummet by as much as 30% in March and further in April, analysts said. Apart from a drop in demand, handset companies are halting production at local plants amid lockdowns ordered by state governments.
“The question is who will you advertise for if people are not buying and how will you distribute the product if there is a complete lockdown in cities and states,” said Navkender Singh, research director at International Data Corporation, India.
Another market expert, who asked not to be identified, said marketing budgets may plunge some 70%.
Neil Shah, research director at Counterpoint Technology Market Research, said the pandemic will impact marketing budgets as TV and digital ad slots will become expensive for the next few weeks.
ET recently reported that marketplaces Flipkart and Amazon, where non-essential items make up over 70% of sales, are staring at a severe blow in the coming quarters.
Waning demand is a major concern in the next three to four months, which will hit company sales. While BBK Group, which owns Vivo, Oppo, OnePlus and Realme, may be able to absorb losses, others such as Xiaomi would be shaken, Singh said.
“Bookings are being cancelled for projects such as airport advertising, which is very heavy on expenditure,” said Dipankar Sanyal, CEO, Platinum Outdoor.
Pioneer Publicity, which owns naming rights of Delhi Metro stations, said clients including phone companies aren’t showing interest and the agency is facing substantial losses daily since last week.
Delhi Metro has halted operations until March 31.