Mutli-brand mobile retailers, who have been overshadowed in smartphone sales in tier-1 cities by e-commerce players in the ongoing festive season, have tuned their focus to small towns to boost sales.
Retailers like Poorvika, BigC and Sangeetha Mobiles are now matching or even beating e-commerce players on speed and coverage in tier-2 and tier-3 markets. Using their 400-600 stores as fulfilment centres and deploying dark stores in partnership with warehousing players in underserved markets, these chains now deliver smartphones in 15-20 minutes across 700+ PIN codes, dwarfing the tier-1 city coverage of Amazon and Flipkart’s quick-delivery and surpassing quick-commerce players who struggle with the inventory complexity of mid-range smartphones.
The strategic push is aimed squarely at the festive season’s most valuable prize: smartphones, which has traditionally account for the lion’s share of online festive season sales in terms of gross merchandise value (GMV). This year hasn’t been much different. In just the first week of festive season sales, smartphone accounted for 42% of e-commerce GMV, according to data compiled by Datum Intelligence.
What sets traditional retailers apart isn’t just speed, it’s the quality of delivery. Online platforms largely treat smartphone orders as any other apart from a dedicated OTP mechanism to prevent theft.
How are retailers coping?
Retailers, on the other hand, are deploying trained executives in their delivery fleets who are equipped to handle smartphone device setup. This includes critical services like screen guard installation, app setup, data transfer from an old phone — offerings which customers have come to expect from mobile purchases but which are absent in the online model.
“These are services that customers have grown accustomed to over a long period of time,” said Chandu Reddy, director of Sangeetha Gadgets, which now delivers smartphones within 15-20 minutes in as many as 800 PIN codes across India.
The hybrid model provides structural advantages. With 800 stores currently and plans to add 50-60 annually, the retailer can offer quick delivery even in tier-4 markets, which remain largely untapped by e-commerce platforms for quick delivery.
Meanwhile, despite their aggressive marketing around 10-minute delivery, e-commerce platforms’ quick-delivery operations remain limited primarily to tier-1 cities.
On the other hand, quick-commerce players like Zepto, Blinkit and Instamart that have doubled down on tier-1 markets but expanding into tier-2 plus cities, they often struggle maintaining stock keeping unit (SKU) variety across distributed micro-warehouses. This is pronounced in the midrange smartphone category which continues to account for the largest portion of smartphone sales in the country.
What did Kailash Lakhyani say?
“In small towns multi-brand retailers continue to have the range advantage. Yet online players do well in limited SKUs like iPhone launch which is growing in terms of overall share of smartphone, reaching about 7-8% due to the aspirational value,” said Kailash Lakhyani, founder chairman of the All India Mobile Retailers Association (AIMRA).
Additionally, traditional retailers continue to hold a significant advantage in financing options. Around 50% of their sales are EMI-based, with partners like Bajaj Finserv enabling purchases even for customers without formal credit history. This capability drives volume sales in smaller cities and towns, markets where affordability through financing remains crucial.
Online platforms, despite their technological sophistication, still struggle to replicate the in-person verification and walk-in support which makes flexible financing accessible to a broader customer base, industry experts suggest. Lakhyani argues that consumer’s trust remains the bedrock of smartphone retail. “Consumers don’t have trust in e-commerce for high-value purchases.
If we need to buy a phone or a car, we’ll go to the showroom, examine it at two or three places, and gain that experience. For items we have been using since childhood, like soap or tea, anyone will order online. But for a laptop or a phone, people still want to touch, feel, and experience it,” he added.
According to Lakhyani, a significant portion of e-commerce smartphone sales never reaches actual consumers. “Only 20% of what sells online goes to actual consumers. The remaining 80% goes to aggregators, grey market operators, and exports,” he claims. “Whether it’s Samsung, Xiaomi, Realme, OnePlus, or Nothing—whatever is sold on e-commerce platforms like Flipkart and Amazon, 80% of that stock either goes to grey market or gets exported.” This inventory leakage, Lakhyani argues, inflates e-commerce sales figures while masking where phones actually end up.