Throughout the course of the last year, etailers have been trying to focus on categories beyond mobile phones. Online fashion retail grew as a result and online grocery is the present focus for Flipkart and Amazon too.
But the mobile phone category that pushed Indian online retail into days of glory has not died away. Shopping trends have not changed very much as per data from the summer sales hosted by Flipkart and Amazon.
Demand for smartphones is still high
In spite of trying to reduce their dependence on smartphone sales, a low-margin category, this segment of online retail proved to be the main sales drive during both Amazon’s and Flipkart’s mega summer sales event.
Flipkart is expected to have received sales worth Rs.800 – Rs.1000 crore from mobiles during the Big 10 Sale. On day one, the etailer sold over 7 lakh smartphones said company executives tracking shipment numbers. This is about three times more than the usual sales mobile phones receive in India, across both online and offline channels in a day.
Amazon also offered heavy discounts on top selling brands in this segment. And, even after the completion of its 4-day Great Indian Festival sale, Prime members can still avail of even higher discounts on Apple iPhones and soon other brands. At the start of foreign etailer’s sale, it saw sales seven times higher than usual in its smartphone category.
Amazon’s deep pockets and Flipkart’s recent funding have allowed the two to indulge in steep discounts to increase their market share in the smartphone category. Online retailers such as Flipkart and Snapdeal received disproportionate sales from the cellphone category during the fast-paced growth of Indian ecommerce from 2014-15.
Smartphone sale strategy
We recently reported that Amazon has extended its discounts beyond its sale to Prime subscribers. This has resulted in a price war among smartphones of certain brands. When questioned if this was a sale extension, a representative of the etailer stated that Amazon offers special discounts all through the year for Prime members, irrespective of sale events or not
“First-time customers opted to buy smartphones as we saw a 50% increase over our January sale. iPhone sales grew 40 times during this sale, making it one of the top-selling categories,” said Arun Srinivasan, director, category management, wireless, Amazon India
Flipkart, on the other hand, widened its play with smartphones. The online marketplace concentrated on premium phone brands since they provide higher margins.
Online marketplaces will continue to keep smartphones at the heart of their growth strategies, it appears. But, diversity is still part of their dreams; will the demand for smartphones delay them from fulfilling these dreams?