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NEW DELHI : Consumer electronics manufacturers, and online and offline retailers, are relying on the festive season to recoup a tough year for sales so far.

The industry is hoping that deep discounts during the festive season, along with new product launches, and consumers’ looking to upgrade to 5G phones, will help make up for the sales lost during the first half of the year due to supply constraints and weak demand.

“With the 5G auction complete and telcos announcing plans to roll out 5G services, we believe this festive season will be a defining moment for 5G device adoption in India," said Muralikrishnan B, president of Xiaomi India.

“We had a tough H1. We want to reverse all that with the festive sales and ensure that we exit the year on a high note," he added.

Earlier this week, the Chinese smartphone maker launched a new 5G smartphone called Redmi 11 Prime 5G in the 10-15k segment, considered the “sweet spot for 5G adoption," as per Muralikrishnan.

He said Xiaomi plans to offer big discounts, exchange offers, and cashbacks during the festive sales. It is also in talks with telcos to bundle data plans with 5G devices while offering discounts on smart TVs and smart home products. Meanwhile, Xiaomi’s native rival, Realme, is set to launch its Realme Festive Days sale on Thursday with 700 crore worth of offers.

Tarun Pathak, research director at Counterpoint Research said, “there is some pent-up demand as many consumers held onto their devices..." and “there will be upgrade offers around 5G, where users can buy 5G phones in exchange for 4G devices".

Retailers are also preparing to capitalize on the festive period. “We expect this to be our biggest Big Billion Days sales and beat even last year’s record," said Bharath Ram, senior vice-president, of user activation and retention at Flipkart. He said Flipkart has made design changes and added new features to its mobile app to lift user experience during the festive sales.

On the offline side, Nilesh Gupta, director at electronics retail chain Vijay Sales, said the company’s encouraging sales programme during the Independence Day has fuelled expectations for “the best festive season sales" this year.

He added that while discounts offered are more or less the same in online and offline channels this year, consumers can expect longer EMI tenures for buying from retail stores.

The company expects 7-10% growth during the festive season sales, as compared to 2019. “It should translate into 25-30% growth in value as prices have also gone up by 18-20% since then," he added.

Interestingly, the industry expects better value from this year’s sales though it doesn’t expect sales volumes to rise. This is because average selling prices (ASPs) of electronic products have increased through this year due to supply chain constraints among issues. At higher prices, companies can derive more value from lower volumes.

According to a quarterly report by the International Data Corporation (IDC), average selling prices (ASPs) of new phones rose by 15% in the quarter ended 30 June from a year earlier. The firm said that ASPs reached around 17,000 this year from around 13,500 last year. “In our projections, we are seeing that volume will decline by 6% as compared to last year, but the value will grow by 6 to 7%," said Pathak at Counterpoint.

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