Recent reports have observed the slowing popularity of smartphones and home appliances. The chief culprits are the November demonetisation and the implementation of FDI (preventing marketplaces from influencing prices). Things went so bad during the week immediately after the announcement, Keshav Bansal, director of smartphone manufacturer Intex Technologies noted that the sales fell by 90%, particularly in the low cash range phones.
Likewise, BSH Household Appliances (part of the Bosch group) noted in January that their sales had significantly dropped. Gunjan Srivastava, the company’s MD and CEO said,
“There has been a reduction in sales from our stores to the end user. It was somewhere between 15-25 per cent in the last two months.”
Offline is the new online
Subhasish Mohanty director of mobility and digital lifestyle company Hotspot said,
“There are virtually no price differences for popular smartphones between online and offline. Hence, offline contribution of smartphones is now going to grow again.”
Even online-only mobiles are considering an offline presence. Pavel Naiya, senior analyst at Counterpoint Research says,
“The online exclusive brands have started to invest in offline retail operations reducing the online traction. Also, the number of new smartphone brands entering the Indian market has reduced over the years and we are expecting this trend to continue.”
Offline stores are taking advantage of the situation by offering discounts and freebies. JK Rajan, an independent consultant at German firm TUV noted,
“I bought a Dell Inspiron (5568) from Reliance Digital on Thursday for Rs 63,999 while on Amazon the price was Rs 76,683. I got a Dell bag and an all-in-one Canon printer for free with the laptop which was not there on Amazon.”
Is the charm of buying mobiles and home appliances online wearing off? Would a buyer rather go to a physical store, see the options and pick what they want? Given that shoppers would visit showrooms, go through the products available and place the order online (for cheaper prices), the comfort of shopping from home might not be a governing factor. Shoppers might reconsider the benefits of shopping online. The possibility of same day delivery is higher when purchasing from a local store.
What can online marketplaces do to offset these hurdles?