Retailers of mobile phones and electronics are worried about a slower recovery from the disruptions caused by the second covid wave this year compared to last year’s lockdown with several retailers almost close to bankruptcy, said industry executives.
“People are falling short of money and aren’t spending enough. I have even seen my customers passing away because of the disease. Every family has suffered, and with expenses for hospitalization and all, people aren’t willing to spend on gadgets or any luxury products unless there’s a real need,” said Manish Khatri, partner at Mumbai-based Mahesh Telecom, a mobile phone retailer.
Arvinder Khurana, national president of the All India Mobile Retailers Association (AIMRA), said that between 30,000-40,000 retailers have already shut shop since last year’s lockdown.
Khurana, who has closed four of his 10 retail outlets of late, said the pandemic has boosted online sales, a sector that has been challenging the growth of offline retailers in India for over five years.
“Their market share was around 37-38% till last year, but after the lockdowns, it has grown to nearly 55%,” he added. With an increasing number of consumers shifting online, India’s retail sector needs strong support from the government right now, said Khurana.
Many retailers had also created omni-channel strategies over the past year, especially with support from brands. However, retailers like Khatri and Khurana said that price differences between online and offline sectors remain a challenge.
Additionally, retailers have to spend a lot on logistics as compared to regular e-commerce platforms, who have wholesale deals with courier services.
Other than mobile and electronics sectors, consumer durables such as air conditioners (ACs) and refrigerators have also been affected by the pandemic.
Such consumer durables garner about 45% of their annual sales during the summer period, according to industry estimates, which have been severely hit for the second year in a row.
“Last year, at least the consumer durables business picked up immediately, so the turnaround was really fast. This year, even that seems difficult. A lot of families have experienced death this year, many have lost their breadwinners, and the overall mood is sombre. People would want to keep their money at hand rather than spend it. The biggest fear that we have is that the bounce back may take longer,” said Nilesh Gupta, director of Mumbai-based Vijay Sales, an Indian electronics retail chain.
“Frankly, it all depends on how fast the vaccinations happen and people’s confidence returns,” he added.
Shashi Arora, chief executive officer of Lloyd, a home appliances maker, said the impact of the second wave will be felt throughout this year.
“The second wave has been very disruptive for the industry, impacting all consumer businesses from mid-April onwards. With the onset of summer season, demand for cooling products such as ACs and refrigerators usually peak during this three-month period. However, this year, the sales were brisk only up for the first two weeks of April,” Arora said. Livemint