Smartphones: Cellphones could get cheaper this festive season as companies seek to liquidate inventory

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Smartphone shoppers could expect deep discounts and multiple rounds of sale offers across e-commerce and offline channels during the upcoming holiday season, market trackers and retailers said. as brands seek to liquidate bloated inventories caused by accelerating inflation and the resulting lukewarm demand globally.

“The festive season in the second half of 2022 is expected to bring deep discounts to the Indian market. Online discount sales increased in the second quarter of 2022, and we expect a further surge in the coming quarters,” said Rajeev Nair, Principal Analyst, Strategy Analytics who tracks consumer market trends.

Brands will look to tap into demand throughout the upcoming holiday season to mitigate the revenue impact of the weak first half of the calendar year.

Abhilash Kumar, telecommunications analyst, Strategy Analytics, added that brands should also launch lucrative EMI options for phones sold from their own websites or offline stores.

Deep discounts could be a way to eliminate accumulated inventory.

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Offline retailers ET spoke to confirmed there was a buildup of inventory, and smartphone brands boosted offline retailer margins in June, reversing the recent trend of channel share cuts. in income, to eliminate inventory. Higher margins for retailers would allow them to offer product discounts even in offline channels.

“Inventory has piled up, margins have been increased to dump products to offline retailers as online channels have reduced their supply. Thus, inventory stuck in the logistics pipeline is now being redirected to offline channels with higher margins, and sometimes even with chargers for models that didn’t initially have them,” said Arvinder Khurana, chairman of the All India Mobile Retailers Association.

Chinese handset companies have also piled up inventory in their home market and are also struggling to sell in Eastern Europe.

“The inventory could be between 50 and 80 million units,” said Sravan Kundojjala, director of Strategy Analytics. “It is possible that some units will be routed to the Indian market, but the situation will likely take time to resolve as the Indian market alone cannot absorb all of these units.”

Samsung, which is India’s second largest smartphone brand, is believed to be stuck with 50 million unsold smartphone units in retail stocks globally. The company did not respond to ET’s questions.

Smartphone brands are also hoping to rebound in the second half after flattening growth due to weak demand amid high inflation and rising average selling prices. The second half of 2022 is expected to garner 58% of the total 181 million shipments forecast for the year, according to Counterpoint Research, indicating 9% year-on-year growth from the second half of 2021 which saw 57% of total shipments. 168 million shipments be moved by brands.

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