EMIs, pre-used items drive Diwali smartphone gross sales

“Whilst different home equipment classes remained flat, our Diwali smartphone gross sales noticed a 40% year-on-year progress. The introduction of zero-interest, two-year financing schemes for smartphones was the most important driver of gross sales, at the same time as patrons proceed to carry on to their telephones for greater than 20 months,” Nilesh Gupta, MD of electronics retailer Vijay Gross sales, mentioned.

Kailash Lakhyani, president of business physique All India Cell Retailers’ Affiliation (Aimra), mentioned the zero-interest, two-year instalment plan was a driver of gross sales for small bodily retailers, too.

In response to a question from Mint, Ranjit Babu, director—smartphones and televisions at Amazon India, mentioned the platform noticed 2.5x larger smartphone gross sales throughout the festive season, pushed largely by “no-cost financing and alternate affords.” Flipkart declined to touch upon its Diwali smartphone gross sales.

For manufacturers, a Xiaomi spokesperson mentioned the corporate now expects the second half of the 12 months to be ‘considerably stronger’ than H1.

Manish Khatri, companion at retailer Mahesh Telecom, mentioned market stagnation amongst prospects is a driving issue behind this. “Prospects in the present day recurrently inform us that there’s no compelling purpose for them to purchase new telephones, and the standard of present telephones have additionally grow to be excellent. Therefore, new purchases are now not being pushed by natural demand—the one section which is seeing such a requirement is the premium smartphones market,” he mentioned.

Consequently, Khatri, and different retailers, are specializing in refurbished telephones. A multi-brand retailer in Delhi, who requested anonymity, mentioned over the previous 12 months, they added a refurbished smartphone outlet of their bodily shops, driving gross sales in a weak 12 months.

The market dynamic comes amid a sustained droop for the smartphone market. Upasana Joshi, analysis supervisor at market analysis agency IDC India, mentioned the finance scheme was a key driver of gross sales for prime retailers, and smaller retailers struggled within the price range section.

“There’s little or no natural demand for smartphones, and the price range section will stay practically flat. The festive season noticed first rate demand in remoted phases, however that might be cancelled out in remainder of the months of every quarter,” she mentioned.

This, Joshi added, is prone to see the December quarter rack up 35 million smartphone items shipped—up from 30 million items within the final quarter of 2022. Nonetheless, even a better-than-expected final quarter of the 12 months wouldn’t be capable to forestall the home smartphone market from seeing a second consecutive annual decline. IDC reported 144 million smartphones shipped in 2022—consequently, 2023 might see shipments both stay flat, or decline by round 1%.

Amid demand dip, the two-year finance scheme has helped retailers with progress—Vijay Gross sales’ Gupta mentioned the chain’s festive season premium smartphone gross sales have been “greater than 40% larger” than final 12 months.

This market dynamic is a boon for refurbishers. Sourav Gupta, chief govt of used smartphone reseller platform Xtracover, mentioned there was a transparent uptick in demand within the festive season. “Fashions of the iPhone have been in huge demand for us, which noticed the common worth per machine offered improve to ₹11,000 from ₹8,500. That is the season the place we’re organizing a largely unorganized refurbished smartphone market, pushed by demand from patrons to get reasonably priced gadgets—and from particular person sellers to promote their used gadgets at a greater worth than their native retailers. On common, this helps us hold a margin of practically 15%, whereas festive gross sales have pushed our margin as much as 25%,” he mentioned.

For giant platforms reminiscent of Amazon, the alternate affords additionally add to their play within the refurbished smartphones house, which business stakeholders mentioned helps organized companies reminiscent of Cashify and Xtracover to develop.

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Up to date: 17 Nov 2023, 12:19 AM IST