Home / Technology / Gadgets /  Offline smartphone sales get a leg up from premium devices

NEW DELHI : The value of smartphones sold through brick-and-mortar retail stores grew sharply in the first half of this calendar year even as offline retailers continued to complain with smartphone makers over an alleged price differential between online and offline sales.

According to a report by market intelligence firm GfK published on Monday, sales in the offline market grew 44% by value in the first six months of 2022. With the start of the festive season, offline retailers have accused smartphone brands of favouritism, claiming that they offer better prices to online retailers. They’ve claimed that this has hurt sales as potential buyers are choosing to buy online instead of visiting physical stores.

On the brighter side, offline sales have returned to pre-pandemic levels this year. “The offline channel growth of smartphones reached 2019 sales levels in 2021. In 2022, it is projected to grow by 25-30% over 2021 by value in offline channels," said Dheeraj Mukherjee, head of sales, India, GfK.

Offline sale of smartphones are being driven by premium products with customers preferring Amazon and other online platforms to buy comparatively cheaper phones.

Kailash Lakhyani, chairman of All India Mobile Retailers Association (AIMRA), said customers prefer offline stores when they are buying phones costing above 30,000 as they want to experience the product beforehand.

GfK’s report noted that smartphones costing above 20,000 comprised 40% of the offline market in the first six months of 2022, a sharp rise from 17%in 2017.

Lakhyani said “70% of stocks of premium phones like iPhones sell in the offline market".

Demand for phones priced above 20,000 has grown across Indian cities between the first half of 2019 and the same period this year.

However, the sales boom in the offline channels might be short-lived. Lakhyani also pointed out that footfalls might drop during this festive season as more consumers choose online channels. “Most of the stock during the festival season sales is with the online market. Even if customers come to offline stores, they don’t get the product, especially during this season. If they find the product, offline stores can’t match online in terms of offers and discounts," he said.

Further, the online market still leads in terms of the total volume of smartphones sold in India. According to market research firm International Data Corporation (IDC), online channels accounted for 52% of smartphone shipments in H1 2022, a 5% rise from last year.

The offline channel, on the other hand, only grew at 1% during this period compared to last year. The marginal growth came after three straight quarters of decline.

Like Lakhyani, IDC also predicted that the online channel will remain strong in the second half of 2022 due to festive sales and discounts and promotions. Last month, market researcher RedSeer predicted that e-commerce retailers are expected to garner sales worth $11.8 billion in gross merchandise value (GMV) this year, a growth of 28%.


Abhijit Ahaskar

Abhijit writes on tech policy, gaming, security, AI, robotics, electronics and startups. He has been in the media industry for over 12 years.
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