With Fewer Discounts, Stern E-commerce Curtails Online Smartphone Purchase Trend

BENGALURU: In the year 2015, online purchase of smartphones was a smart and convenient option for people. However, the first half of 2016 saw a rapid decline in the number of smartphone purchases made online. The strict e-commerce rules that were imposed in March which allowed to fewer discounts can be pointed out to be the prime reason behind this decrease in the online sales. Aiming to motivate offline retailers, the government introduced new rules for 100% FDI in the retail sector. This initiative restricted the freedom of e-commerce retailers to alter the prices of goods and services offered on their online websites, debarring the trend of offering attractive discounts.

Counterpoint Research states that the issue has become a major concern for several brands such as Micromax's Yu Televentures, LeEco and Xiaomi which are primarily focused on online sales. The companies have now decided to effectively initiate the process of in-store sales.

The research also says that the online smartphone sales shares experienced a drop of 32% during the first six months of 2016, when compared to a massive 37% drop in 2015’s last six months, and 28% in the April-June period of last year. A statement given to the ET by Navkendar Singh, International Data Corporation's (IDC) senior research manager explains that the new shift towards the offline smartphone sales can be expected to continue as retailers understand the importance of staging a consistent offline distribution platform.

However, major e-commerce players such as Flipkart and Amazon have claimed that they have not experienced any decline in their smartphone sales online.

"Smartphones is one of the fastest growing sub-categories, witnessing over 48 per cent (QoQ) growth in 2016. In June this year, smartphone sales doubled as compared with January," says a spokesperson from Amazon India.

Read Also: India Looking At Investments From Africa
IBM Hybrid Cloud To Bolster Vodafone India's Customer Engagement