Rapidly growing e-commerce growth hurt small retailers, while the popularity of Chinese smartphone makers forced many Indian brands to shut shop.

Over 25 lakh jobs cut in Indian handset business as small retailers hit
Atom Tech Shorts Tuesday, July 30, 2019 - 14:39

The mobile handset business in India is undergoing a transformation and one of the first consequences is the number of job losses in the sector. An Economic Times report puts this figure at 250,000 and it is believed a major part of this number represents those engaged as in-shop brand promoters, following the shutting down of retail outlets. There have been some job losses in the mobile units manufacturing sector too. That is due to at least two domestic brands Intex and Karbonn, which seem to have shut down. Two others, Micromax and Lava, have scaled down their operations including downsizing their workforce.

One may put the blame on the Chinese brands that have swept away the market and that has resulted in these huge job losses. The reality could however be a combination of circumstances. One of the major influences in the mobile phone market at least is the evolution of the ecommerce platforms. Whichever way you look at it, the impact this has had on the market cannot be ignored. Flipkart and Amazon claim a major contribution to their revenues is through mobile phones and electronic goods. Many brands have released their devices on online-exclusive basis leaving the buyers with no choice but to order their phones online. The most important of all, these e-commerce sites have been offering fabulous prices for the phones which no offline retailer can match.

All these have resulted in small-time mobile retail businesses having to close down their businesses. Even if there was one employee per shop, the number of people left without a job would run into thousands. The slightly larger format outlets, which might have employed 4-5 brand promoters have also been forced to scale it down to one or two hands since there is a paradigm shift in the way the customers make their decisions on which mobile to buy. There are online resources which carry reviews and comparisons and help in making up their minds. Many of them, even in non-metropolitan cities, may be walking into mobile phones showrooms clear in their thoughts on which model to buy. Brand promotion has very little to do on such occasions.

The Chinese influence is not attempted to be downplayed here either. Brands like Xiaomi, Oppo, OnePlus and Vivo and others dominate the market with over 75% of the mobile phones sold in India being these Chinese brands. Samsung, the South Korean brand is the only exception.

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