NEW DELHI : Refurbished smartphones and no-interest financing schemes unfold over two years grew to become the clear demand drivers for retailers in final week’s Diwali sale, which had been higher than business expectations, insiders stated. The 2 elements mixed to supply a silver lining for India’s smartphone sellers, at the same time as natural demand for smartphones continued to stay tepid at greatest within the second-largest smartphone market on this planet.
“At the same time as different home equipment classes remained flat, our Diwali smartphone gross sales noticed a 40% year-on-year progress. The introduction of zero-interest, two-year financing schemes for smartphones was the largest driver of gross sales, at the same time as patrons proceed to carry on to their telephones for greater than 20 months,” Nilesh Gupta, MD of electronics retailer Vijay Gross sales, stated.
Kailash Lakhyani, president of business physique All India Cellular Retailers’ Affiliation (Aimra), stated the zero-interest, two-year instalment plan was a driver of gross sales for small bodily retailers, too.
In response to a question from Mint, Ranjit Babu, director—smartphones and televisions at Amazon India, stated the platform noticed 2.5x larger smartphone gross sales throughout the festive season, pushed largely by “no-cost financing and change provides.” Flipkart declined to touch upon its Diwali smartphone gross sales.
For manufacturers, a Xiaomi spokesperson stated the corporate now expects the second half of the yr to be ‘considerably stronger’ than H1.
Manish Khatri, accomplice at retailer Mahesh Telecom, stated market stagnation amongst prospects is a driving issue behind this. “Prospects at present commonly inform us that there’s no compelling purpose for them to purchase new telephones, and the standard of current telephones have additionally grow to be superb. Therefore, new purchases are not being pushed by natural demand—the one phase which is seeing such a requirement is the premium smartphones market,” he stated.
Consequently, Khatri, and different retailers, are specializing in refurbished telephones. A multi-brand retailer in Delhi, who requested anonymity, stated over the previous yr, they added a refurbished smartphone outlet of their bodily shops, driving gross sales in a weak yr.
The market dynamic comes amid a sustained droop for the smartphone market. Upasana Joshi, analysis supervisor at market analysis agency IDC India, stated the finance scheme was a key driver of gross sales for high retailers, and smaller retailers struggled within the funds phase.
“There may be little or no natural demand for smartphones, and the funds phase will stay almost flat. The festive season noticed respectable demand in remoted phases, however that shall be cancelled out in remainder of the months of every quarter,” she stated.
This, Joshi added, is prone to see the December quarter rack up 35 million smartphone items shipped—up from 30 million items within the final quarter of 2022. Nevertheless, even a better-than-expected final quarter of the yr wouldn’t have the ability to forestall the home smartphone market from seeing a second consecutive annual decline. IDC reported 144 million smartphones shipped in 2022—in consequence, 2023 might see shipments both stay flat, or decline by round 1%.
Amid demand dip, the two-year finance scheme has helped retailers with progress—Vijay Gross sales’ Gupta stated the chain’s festive season premium smartphone gross sales had been “greater than 40% larger” than final yr.
This market dynamic is a boon for refurbishers. Sourav Gupta, chief govt of used smartphone reseller platform Xtracover, stated there was a transparent uptick in demand within the festive season. “Fashions of the iPhone had been in massive demand for us, which noticed the common value per machine offered enhance to ₹11,000 from ₹8,500. That is the season the place we’re organizing a largely unorganized refurbished smartphone market, pushed by demand from patrons to get inexpensive units—and from particular person sellers to promote their used units at a greater value than their native retailers. On common, this helps us maintain a margin of almost 15%, whereas festive gross sales have pushed our margin as much as 25%,” he stated.
For big platforms reminiscent of Amazon, the change provides additionally add to their play within the refurbished smartphones area, which business stakeholders stated helps organized companies reminiscent of Cashify and Xtracover to develop.
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Up to date: 17 Nov 2023, 12:19 AM IST
