According to retailers, smartphones between the price range of Rs 12,000 to Rs 20,000 have been in demand.

A representative image of a mobile store
Atom Smartphones Thursday, May 28, 2020 - 09:55

With standalone mobile stores opening over the past few weeks, smartphones between the price range of Rs 12,000 to Rs 20,000 have been in demand, retailers say.

According to Arvinder Khurana, president of All India Mobile Retailers Association, there has been a huge pent up demand for smartphones in this range, that were purchased when the lockdown was eased.

“The consumer is a little hesitant to buy expensive handsets, so the sales of handsets around Rs 15,000 has gone up quite a bit,” he added. This range would mainly include smartphones by Xiaomi, Vivo, Oppo and Samsung’s M series.

Xiaomi has said in a statement that during the lockdown, over a few weekends, the company witnessed sales in about 50% of its offline stores in Kerala and saw two times the usual demand, which is a validation of mobile phones being an essential commodity during such conditions.

“As sales are slowly resuming, we see the demand getting back to routine and if the situation stays under control, we expect the business to bounce back during Q3 and Q4 this year. As per industry predictions, the smartphone market in India may perform around 135-145Mn in 2020,” a company spokesperson said.

Vivo said that the smartphone industry is slowly getting back on track. Vivo introduced a new retail model in place where consumers could send in their product queries via SMS or online. The company says it has already received more than 30,000 consumer enquires on these platforms

Samsung and Oppo are yet to respond to TNM’s queries.

One of the main reasons that consumers are refraining from buying expensive phones, retailers say, is because financing options have gone down. Non-banking financial companies are hesitant to offer financing because instalments may not come in immediately due to the available option of a moratorium.

“NBFCs are asking for at least 30 to 40% of down payment which initially was zero per cent before the lockdown,” Arvinder says.

Another factor, retailers say, could be because of rampant job losses, consumers want to hold off on purchase of expensive items, including premium smartphones.

Despite these smartphones seeing demand, Arvinder says that the initial demand has mainly been a pent-up demand and that now with online sales opening up, there has been a decline in the past 10-12 days. Moreover, cheaper smartphones being sold means that the average selling price has also come down by 15-20%.

“It might be slightly early to say how sales will be, but we foresee that in the coming months, it will be a very bad situation for us. The average business will not be more than 30-40%. You will see a lot of shops and businesses collapsing and shutting down in the next six months,” Arvinder adds.

What is also affecting retailers is that the number of hours in a day and number of days in a week the store can open have reduced. Footfall, too, has drastically gone down.

Retailers are also now grappling with lesser stock after having initially sold the existing stock. Manufacturing has slowly started picking up only now, but with lesser manpower. This has also affected the supply chain.