If you are planning to buy a smartphone in the near future then is some reason for you to cheer. India’s top five handset brands are about to clear their online and offline channel inventory with heavy discounts and attractive schemes on smartphones. Particularly in the offline channel there is more inventory and it will continue till March-end, the ET reported citing analysts.
Xiaomi, Realme and Samsung, which play both in the online and offline space, haven’t been able to clear inventory of old models in the October-December quarter while they continue launching new devices, industry watchers said. They added that Vivo and Oppo, who play mainly in the offline segment, also face similar issues but to a lesser extent.
Xiaomi and Realme denied facing any inventory pile-up issues. Samsung, Oppo and Vivo did not respond to the queries of the publication.
“There have been inventory levels throughout the past few quarters across channels and brands. This inventory is expected to continue to the last quarter,” Upasana Joshi, associate research manager, Client Devices, IDC, told ET. She said that inventory issue is a worry round the year with many brands immediately announcing price drops in a months’ time after new product launches. “…offline sales will remain muted owing to heavy aggression by online platforms in terms of deep discounting, offers and cashbacks.”
Counterpoint Research’s associate director Tarun Pathak said there was an inventory pile up, but the situation was better than last year. “Most of the top five brands were cautious about their sell in this year and were watching the situation closely,” he added.
Pathak added that handset brands with good online exposure are better poised to get rid of inventory, but brands with offline inventory will face challenges. “If there are older models that didn’t sell well, then they undergo price cuts to get rid of their inventory. The price cut procedure is easier for online brands like Xiaomi and Realme to take and to get rid of the inventory as compared to the ones in offline space,” the business daily quoted him as saying.
Muralikrishnan B, chief operations officer at Xiaomi India, however, said that the brand today has the lowest level of inventory in the last several quarters and in fact, it is trying to further scale up supply and manufacturing to meet demand.
Realme India CEO Madhav Sheth too denied any inventory pressure and said that the brand always prepared its stocks based on the consumer demands. “Our previous models were also sold out in a shorter time,” he added.
The publication citing industry executives said that the smartphone ecosystem needs to align itself to clear off these piling inventories by offering attractive channel schemes, especially offline, price drops by brands on the older line-up and attractive consumer schemes like cashback offers, No cost EMI, buyback options etc to fill newer stocks in the market.
“Offline has got more inventory levels since online has stressed offline already. Some of Xiaomi’s partners are stressed since the brand launched new devices like Note 8 pro but didn’t provide clarity on existing inventory of old models,” a senior industry executive familiar with the matter said. “The brand offered discounts on various models, including K20 Pro”.
The person added that Samsung’s inventory issue has become “severe”, with a vacuum created by delayed launch of Galaxy A series and the brand couldn’t clear existing A series, which helped Chinese brands during the festive season.
Worth mentioning here is that Samsung has started blacklisting retail partners that are selling its online exclusive devices in the offline space. “There is a leakage happening for M series,” the ET report quoted another company official as saying.―Times Now