E-commerce contribution to total sales of smartphones and televisions has touched a new high this festive season. For smartphones, online sales have touched record 55-60% of total category sales last month, overtaking the halfway mark for the first time, while online sales of televisions was 40-45%, estimates by multiple leading brands said.
This compares with a norm of 40% for smartphones and 30% for televisions, they said. In 2018 festive season, e-commerce contribution was around 50% for smartphones and around 25% for televisions as per market trackers.
Consumers preferred online shopping due to high discount, wide reach in smaller markets where offline distribution is still weak, faster deliveries and plethora of no-cost finance offers. Online shopping is becoming a habit in large cities.
Smartphone maker Realme India CEO Madhav Sheth said e-commerce contribution to the overall smartphone sales have increased due to variety of choices and e-commerce platforms extending their delivery services to tier 3 and 4 markets.
“For smartphones, online has become a dominating sales channel this festive season and could account for almost 60% of total sales,” said OnePlus India general manager Vikas Agarwal. The festive month is the most crucial period for the industry and contributes almost 30% of annual sales, he said.
In television, online-focussed Xiaomi said it sold over six lakh units of smart televisions last month while the overall Indian market sells about four lakh units per month.
Three industry executives said leading television makers dropped prices of their televisions in e-commerce much more than in offline, while online focussed brands like Thomson, Kodak, Panasonic-owned Sanyo, BPL and Vu created new pricing lows.
Panasonic India CEO Manish Sharma said e-commerce focussed products and attractive price proposition drove online sales of televisions. “It’s just not the online-focussed, but even the large omni-channel brands are now focussing on growing television e-commerce business. The trend is becoming similar to smartphones,” he said.
Sales of televisions up to 43-inches screen size — which account for almost 65% of the overall market by units sold — shifted to e-commerce pushing up the online contribution. In contrast, television sales in brick-and mortar stores remained stagnant this festive season despite good demand for large screens due to a decline in the units sold in the sub-43 inches segment, industry executives said.
Offline retail lobbies including Confederation of All India Traders (CAIT) and All India Mobile Retailers Association had strongly criticized e-commerce marketplaces and brands for being allegedly hand-inglove and offering deep discounts. This, they said, shifted the consumption to online from offline during the festive season, accounting for a steep 30-40% fall in sales at brick-and-mortar stores.
Lobby group CAIT even said the reduction in goods and services tax collection in October was not due to the economic slowdown but a result of major chunk of offline sales shifting to e-commerce during festive season where products were sold at deep discounting leading to lower tax payouts.―Gadgets Now