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Flipkart, Amazon to sell 15 mn smartphones during the festive period

The new normal of the smartphone industry has set in with hybrid channel becoming a reality. The channel is expected to grow complimenting the online and offline strategy of brands also leading to channel conflict resolution.

As markets unlock and people start to resume their normal activities, with all precautions and care, Smartphone is yet again ready to act as a catalyst product driving the sentiments towards positivity in the market.  The initial response from the channels – online as well as offline is that the people have started buying smartphones, which is emerging as a lead product category as shopping resumes.

Sharing the report highlights released by techARC today, Faisal Kawoosa, Founder & Chief Analyst said, “Covid-19 has taught us all new ways of doing business.  The pure play offline channel has gone hybrid and is using online to aggregate demand complimented by same day home deliveries even in non-metro cities and towns.  These Mom & Pop multi-brand stores are leveraging apps like WhatsApp, Instagram and Facebook to sell smartphones while users may remain reluctant to visit markets for purchase.”

Key Insights

  • Flipkart and Amazon estimated to sell 15 million smartphones during the festive sales period, which is 36.6% of the total estimated sales for the quarter OND’2020.
  • The total estimated sales for the year are revised at 128 MN units, against the earlier estimates of 127 MN released in June 2020.
  • Estimates for Q4 smartphone sales are up by 2 MN units at 41 MN.  This is led by positive sentiments propelled by online market-places as well as.
  • Samsung and Realme among likely top gainers.  Micromax could also show some upward movement with its comeback.  Xiaomi, OPPO and Vivo expected to show stable outlook.  Nokia, Lenovo (including Motorola), Poco among others set to sell less.  OnePlus and Apple also likely to gain.
  • While online platforms lead in rejuvenating the market, hybrid channel (o2o) set to contribute all time high at 6% of the total estimated sales for the quarter.  Pureplay online and offline channel contributions to be at 49% and 45% respectively.
  • Brands like Xiaomi, Vivo and Samsung have already announced their own models of hybrid channel sales.  However, the growth in hybrid model comes from offline retailers using online for demand aggregation with limited geographic catchment.
  • The premium segment, Rs 25,000-50,000 to remain in spotlight.  Sales also likely to pick up in 15,000 – 25,000 range.
  • The report also outlines the key reasons for resumption of sales in smartphones as enumerated below: –
  • People sentiments, including of employees are changing towards positive as many believe that the worst is over.  They are now gradually spending on non-essential items beyond groceries and medicines.  These include buying electronics led by Smartphones, ordering food, planning break-out travel trips, among others.
  • Smartphones have been overused since the start of Covid-19.  Average usage of smartphones has doubled.  This is pushing a considerable user base to go for early replacements and upgrades.
  • The season has again come with exciting offers and discounts.  At the same time, there are left over inventories of smartphones which includes flagships as well.  Users are seeing value in buying these phones where the discounts could go as high as 55-60%.
  • The recent package announced by government encouraging its employees to spend on non-essential items is also going to benefit the smartphone as a product category.

-Adgully

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