Online smartphone sales may fall in Jan-Mar quarter as new FDI norms kick in: Report – Times Now

New Delhi: Online smartphone sales are likely to take a big hit in the current January-March quarter as new FDI rules for ecommerce kicked in from February 1, the Economic Times said citing a report from research firms IDC and Counterpoint Technology Market Research. Worth mentioning here is that the new FDI rules on online sales include restrictions on discounts among other curbs.

Typically, ecommerce contribution to smartphone sales goes as high as 38-40% but due to the curbs, this contribution may fall to 26-27% in the current quarter, the report said.

“There is already an impact…Typically, ecommerce contribution goes as high as 38-40% (of overall sales which include offline) during the festive season, but in Q1-Q2, it hovers around 30-31%. This time, it might fall by up to 4% because of the policy change,” the ET report quoted Tarun Pathak, associate director at Counterpoint as saying. Pathak said the FDI rules will impact model exclusivity for brands on online channels. “…a lot of companies have agreements in place. This can also delay time-to-market,” he added.

Faisal Kawoosa, founder and chief analyst at TechArc told ET that other than exclusive sales, the hit will also come from offers and discounts, which are barred. “We estimate that around 35% of online sales are triggered due to offers/promotions and discounts,” he added.

Companies like Honor, Asus and Realme would see the maximum decline in sales as they are online-only or online-heavy brands, Prabhu Ram, head, industry intelligence group at market research firm CyberMedia Research, told the publication. These companies have now started forming partnerships with stores such as Reliance Digital and Croma, he added.

Source : Google News

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