Physical Retailers Outperform Online in Smartphone Sales Amid Challenging Market

Physical Retailers Outperform Online in Smartphone Sales Amid Challenging Market

VoM News Desk | November 19, 2023 | 11:16 PM IST | Breaking News | Follow on Google News

Physical Retailers Outperform Online in Smartphone Sales Amid Challenging Market

Physical Retailers Outperform Online in Smartphone Sales Amid Challenging Market

Brick and mortar retailers in India are set to outpace online sellers in smartphone sales this year, despite an overall decline in consumer demand for smartphones. This trend marks a significant shift in the consumer electronics market dynamics.

Increased Shipments and Festival Sales

According to IDC India, smartphone shipments in the December quarter are projected to be around 35-37 million units, a 17% year-on-year growth. This increase is attributed to better-than-expected festival season sales, aiding brands in clearing inventories more effectively than the previous year.

Overall Decline in Smartphone Demand

Despite the growth in shipments during the festive season, the overall demand for smartphones in 2023 is expected to decline. Full-year projections anticipate a 1% year-on-year decrease, totaling around 143 million units.

Growth in Physical Retail

The first half of 2023 saw a decline in smartphone shipments to online retailers by 15%, while those to physical retailers grew by 11%. This trend is expected to continue in the second half. Retailers like Vijay Sales reported over 40% year-on-year growth in festival season sales, driven mainly by smartphones.

Revenue Growth in Physical Retail

The growth in physical retail is seen more as revenue growth rather than volume-driven. Industry stakeholders attribute this to better parity in offers, financing, and deals between online and offline sellers. Physical retailers also offered bundled product offerings to compete effectively.

Market Dynamics and Brand Strategies

The shift in market dynamics, including the overall shipment decline of online-first brands like Xiaomi and Realme, contributes to this trend. Consumers are opting for new phones less frequently due to longer device longevity and a lack of compelling new features. Online sales are expected to fall, while physical retailers could see year-on-year growth.

Smartwatch Industry Trends

Similar trends are observed in India’s smartwatch industry, where physical retailers are expected to account for nearly 40% of all sales by the end of 2024, particularly in smaller cities.

Despite a decent year for physical sellers, stakeholders like Manish Khatri of Mahesh Telecom, note a continued muted market outside the festive season. The demand is primarily for premium and refurbished phones, with a limited market for new devices.

This shift towards physical retail highlights the evolving consumer preferences and market strategies in India’s consumer electronics sector.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.