Weak consumer demand and rising prices weighed heavily on the offline smartphone market in the recently-concluded Diwali festive season. 

According to industry body All India Mobile Retailers Association (AIMRA), mobile phone retailers saw sales volumes decline by 18-20% over the four-day period between Dhanteras (November 6) and the day after Diwali (November 9). 

However, overall sales value remained broadly in line with last year’s festive season on the back of higher average selling prices.

Nevertheless, AIMRA noted that the “steeper contraction” in volumes squeezed margins and store profitability across mainline retail channels.

The industry body also said that offline smartphone sales volumes in the seven days preceding Dhanteras plunged nearly 40% as consumers delayed purchases in anticipation of festive offers. However, the demand picked up as customer footfall grew during the four-day period.

Giving a breakdown of the demand data, the report noted that urban consumers showed muted interest in upgrading devices, while Tier 1, Tier 2 and Tier 3 markets recorded stronger momentum – especially particularly in the mid-segment. 

Most purchases were concentrated in the ₹30,000-60,000 price band after offers, while the premium segment also saw healthy demand, as per the report.

The sub-₹20,000 segment was particularly impacted by a shortage of fresh, competitive 5G models from leading brands. As a result, some value-conscious buyers shifted to brands such as HMD, Lava, Ai+, Tecno and itel, while others opted for pre-owned and refurbished devices to access higher specifications at lower prices. 

AIMRA also said that financing emerged as another constraint during the festive season.

Source link