Discounts on smartphones and TVs boost ecommerce sale in 2017

KOLKATA: Online sales of smartphones and televisions hit a high note in 2017, compared with the year before, and even outpaced sales in brick-andmortar stores, helped largely by discounts. Industry attributed this trend to wider penetration and cheaper 4G services along with the launch of online exclusive models by different brands.

Smartphone sales online grew 23% last year, compared with 16% in 2016, according to Hong Kong-based cellphone sales tracker Counterpoint Research.

CMR India estimated that the category grew 25% in 2017, against 22% the year before.

The online sale of televisions grew by more than 100% last year compared with 45% the year before, according to the Consumer Electronics and Appliances Manufacturers Association (CEAMA).

In contrast, smartphone sales in brick-and-mortar stores grew 9% last year and the overall market grew by 12%, while the television market stayed flat.

Counterpoint Research associate director Tarun Pathak said online sales events, promotions and offers drove the market. “The online channel contributes 33% to the total smartphones shipped in India during 2017, which is the highest in the world,” he said.

Prabhu Ram, head of the industry intelligence group at CMR, said brands such as Xiaomi, OnePlus, Lenovo and Vivo rolled out exclusive models with high specifications at value-for-money price points which also drove online sales.

CEAMA president and Panasonic India CEO Manish Sharma said the online sale of televisions weren’t impacted due to both a low-base effect and aggressively priced models. Online accounts for 15% of the overall television sales in the country.



The top online marketplaces — Flipkart, Amazon and Paytm Mall — had run multiple promotions last year with heavy discounting, buyback and cashback offers to push sales in the aftermath of demonetisation and the rollout of the goods and services tax (GST), which had impacted consumer sentiment. In 2016, discounts had levelled out after the government had prohibited online marketplaces to offer heavy discounts, which were partly funded by the marketplaces impacting sales growth.

“The marketplaces bought back discounts last year and ensured that they are playing by the rules — discounts last year were offered by either the brands or the seller,” said the head of a leading online focused cellphone brand.

The two largest ecommerce marketplaces, Amazon and Flipkart, said exclusive models, promotional offers such as buyback and EMI schemes, and dedicated logistics network drove online sales.
A Flipkart spokesperson said the marketplace grew 100% in televisions and large appliances, while in smartphones the growth was 70% last year. An Amazon India spokesperson said online sales for these categories continues to grow as it offers a great mutual win-win for brands and customers.

At the same time, telecom operators reduced mobile internet tariffs and drove expansion into smaller cities last year.

“The arrival of affordable 4G and penetration into smaller cities ensured that a lot of new customers bought online, while for city shoppers, online has attained the trust factor thereby driving sales faster,” said online-focused smartphone maker OnePlus’s general manager for India Vikas Agarwal.

“Even a lot of smartphone brands started focusing on online as a serious channel last year, launching exclusive models and dedicated sales strategy.”economictimes

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