Smartphone sales see growth online

By: |
July 07, 2021 1:45 AM

Pandemic has helped sale of smartphones on online marketplaces as well as through initiatives like D2C

Several smartphone makers took to various virtual means to reach out to potential customers. In 2020, Vivo launched a lead generation programme for its online channels called Vivo Smart Retail (VSR).Several smartphone makers took to various virtual means to reach out to potential customers. In 2020, Vivo launched a lead generation programme for its online channels called Vivo Smart Retail (VSR).

As a result of the country being in various stages of lockdown, smartphone makers are depending on the online channel now more than ever before. In the pre-pandemic era, the share of online smartphone sales to its overall sales stood at 42% in 2018 and 37% in 2019, according to IDC. As per recent data, this has increased to 48% in 2020.

Several smartphone makers took to various virtual means to reach out to potential customers. In 2020, Vivo launched a lead generation programme for its online channels called Vivo Smart Retail (VSR).

The brand, through Facebook, its D2C (direct to consumer) platform, created a mechanism allowing customers to generate queries online. A Vivo representative addresses the queries and demonstrates the products over the phone on a video call.

The ‘lead’ is transferred to the nearest store, and if the customer is willing to buy, then the product is delivered at home. “Since last year, the VSR programme has received traction. We have delivered over one lakh smartphones between May and June 2021 itself,” said Nipun Marya, director- brand strategy, Vivo India.

Further, 2020 also saw a marked upgrade from feature phones to smartphones for various consumer groups.
“Over 30 million people moved from feature phones to smartphones in 2020, and we expect this to continue,” said Sanmeet Singh Kochchar, vice-president, MENA & India, HMD Global (makers of Nokia).

Tapping into this market, Nokia launched a few smartphone models in the affordable price band of Rs7,000 to Rs12,000.

“We witnessed most of this demand, of feature phone customers transitioning to smartphones, through our online channels,” added Kochchar.

Since 2020, the company has expanded to more than 700 stores, but still finds online channels, both marketplaces and D2C, critical for growth. Currently, delivering across 75,000 pin codes, the company’s focus is on Tier-II and -III markets, which have been major growth drivers.

In Q1 of CY2021, online sales contributed 25% y-o-y growth of the overall smartphone market, in comparison to Q1CY 2020, as per IDC. “During this quarter, the share of spending increased because the market had started opening up,” observed Prachir Vardhan Singh, senior research analyst, Counterpoint Research.

He added that the sales during the second wave were better compared to the first wave due to new schemes offered by marketplaces. With the gradual removal of restrictions across the country, most online retailers are currently witnessing high-pent up demand, added Singh of Counterpoint.

E-tailers have also ramped up their product portfolios and back-end operations to ensure a smooth supply chain and distribution this year.

“Currently, marketplaces like Amazon and Flipkart have a huge share in the online smartphones market, but brands are also trying to promote their D2C platforms through offers, as they want to engage with their audience directly and cross-sell other products as well,” added Singh of Counterpoint.According to Navkendar Singh, research director- client devices and IPDS, IDC India, the key challenge for brands looking to ramp up D2C is affordability, new offers, EMIs and a credit line competitive enough to take on marketplaces.

He added that the share of online sales for smartphones to overall smartphone sales may not go beyond 50% in the near future, because some consumers are still not comfortable with the digital medium for such a high involvement/high-value product.

Recent e-commerce rules tilted against flash sales might be another challenge for marketplaces, if enough clarity isn’t available about them.

In H2 of CY 2020, online smartphone sales had gained momentum after a dry run in the earlier part of the year, chiefly due to sales by marketplaces, including Big Billion Days (Flipkart) and The Great Indian Festival (Amazon).

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