Brick-and-mortar businesses, regardless of size, are increasingly concerned about buyer preferences shifting toward online shopping. (Image credit: Manu Del Moral/Unsplash)
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Brick-and-mortar businesses, regardless of size, are increasingly concerned about buyer preferences shifting toward online shopping. (Image credit: Manu Del Moral/Unsplash)
The first phase of the long festive season sale, which has just concluded, saw a steep decline in the sales of smartphones. It was a slow start for the month-long festive sales this year, hosted by major e-commerce players Amazon India, Flipkart, and offline brick-and-mortar stores.
“There has been a double-digit decline, during the first phase of festive sales, which is unlike any other year,” Prachir Singh, Senior Research Analyst at Counterpoint Research, told Acko Byte.
The annual festive sales, which kicked off on September 26, saw demand pick up after Navratri, as buyers received their paycheques post the Shraadh period.
According to preliminary data from Counterpoint Research, the first phase (12 days) of the festive sale witnessed 68-70 per cent of smartphone sales from online channels such as Amazon.in and Flipkart. However, battling aggressive discounts by online players, the tables were turned quickly by physical retailers, and online sales came down to 55 per cent.
Brick-and-mortar businesses, regardless of size, are increasingly concerned about buyer preferences shifting toward online shopping, which offers convenience, rapid delivery, and competitive pricing.
Echoing similar sentiments, Abhilash Kumar, Industry Analyst at TechInsights said, “Online accounted for around 78 per cent of the sales in the first wave of festive season. For the full festive season which lasted roughly 35 days, the online ratio was lesser.”
Asked how offline retailers managed to fight back, Singh explained: “As Diwali approached, sales at brick-and-mortar stores picked up because people can understand financing schemes better in person.”
No-cost EMIs by financial institutions played a pivotal role in the festive season. “A significant chunk of phones, especially the flagship ones, were sold on EMI on Flipkart and Amazon.in,” Kumar noted.
Interestingly, this trend gave a push to the premium smartphone segment in India. “When a buyer walks into a store to buy a phone worth Rs 30,000, he ends up buying a handset that costs Rs 45,000,” Singh added.
Commenting on the bumper sales of smartphones on e-commerce platforms in the first phase of Diwali sale, Kailash Lakhyani, Chairman, All India Mobile Retailers Association (AIMRA) told Acko Byte, "Products are made specially available to online platforms, days ahead, almost a month before the sales begin. The handsets are sent to small retailers via grey market. Also, big aggregators make the handsets available to them. This is why the first wave of festive sale is always higher for online retailers."
He also maintained that the second leg of festive sales is always dominated by mainline or brick-and-mortar sellers as they let buyers experience products before making a purchase.
Notably, last month, Counterpoint Research had predicted 3 per cent growth in smartphone sales volume and a 9 per cent increase in sales value for the entire festive season.
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