“The festive season in H2 2022 is expected to bring some sharp discounts to the Indian market. Online discount sales have increased in Q2 2022, and we expect renewed pressure thereafter in the coming quarters,” said Rajeev Nair, senior analyst. . Strategy analysis that monitors consumer market trends.
Brands will try to leverage demand through the upcoming festive season to mitigate the revenue impact of the weak first half of the calendar year.
Abhilash Kumar, telecommunications analyst at Strategy Analytics, added that brands are also expected to launch lucrative EMI options for phones sold from their own websites or offline stores.
Deep discounts can be one way to clean up accumulated inventory.
Online retailers that ET spoke to confirmed that there is an inventory buildup, and smartphone brands increased margins to offline retailers in June, reversing the recent trend of declining channel share in revenue to clear inventory. Higher margins to retailers will enable them to offer discounts on products, even in the offline channels.
“Stocks have accumulated, margins have been increased to dump products at offline retailers as online channels have reduced their supply intake. Thus, the stock stuck in the logistics pipeline is now being diverted to offline channels with higher margins, and sometimes even with chargers for models that no one initially put together, ”said Arvinder Khurana, president of All India Mobile Retailers Association.
Chinese mobile phone companies have also accumulated inventory in their domestic market and are also struggling to sell in Eastern Europe. “The inventory can be anywhere between 50 and 80 million units,” said Sravan Kundojjala, director, Strategy Analytics. “It is possible that some units will be diverted to the Indian market, but the situation will probably take time to resolve as the Indian market alone cannot absorb all those units.”
Samsung, which is the second largest smartphone brand in India, is reportedly stuck with 50 million units of unsold smartphones in distribution stocks worldwide. The company did not respond to ET’s inquiries.
Smartphone brands are also hoping for a downturn in the second half of the year after flattened growth due to low demand amid high inflation and rising average selling prices. According to Counterpoint Research, the second half of 2022 is expected to collect 58% of the total 181 million shipments forecast for the year, indicating a 9% growth per year from H2 2021 accounting for 57% of the total 168 million shipments by moved. trademarks.