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New Delhi: Online smartphone sales picked up once again in April after a sharp decline in the March quarter amidst challenges faced by Chinese brands looking to expand offline, market trackers said.
The share of online platforms in overall shipments increased to 41% in April, after it declined a tad to 39% in Q1 2024, mainly on account of brands flooding online channels ahead of the summer sales, according to Counterpoint Research.
The growing streak – at the cost of the brick-and-mortar stores – is likely to have continued in May and June as well as deadly heatwaves in North and West India reduced footfalls at retail stores, analysts said, adding that the June quarter will see a slowdown in terms of shipments compared to the March quarter.
“The heatwaves that were prevalent through the months of May and June, and even in July, will have a negative impact on offline retail sales of smartphones. Footfalls in retail stores have fallen drastically during the period, and customers were spending more on appliances like air conditioners and refrigerators over smartphones,” said Shilpi Jain, senior research analyst at Counterpoint Research.
Chinese smartphone brands looking to expand their presence across offline retail stores also faced resistance from retailers due to poor stock availability and low margins, pivoting once again towards online channels and increasing their share, the research firm said.
For instance, OnePlus, which has been on an expansion spree in the offline segment, saw shipments in April plunge by 28% month-on-month and 54% year-on-year, said Counterpoint Research.
Jain said the brand was mainly growing on the back of its offline expansion in the past four quarters, but resistance from retailers affected shipments.
Due to the stand-off with retailers, OnePlus’ share in online channels increased by over 70% in April, from 61% same time last year. Similarly, Realme saw its online channel share increase in April on the back of new models targeting the online segment, with its share touching 69% in April from 60% last year, Jain said.
Meanwhile, Xiaomi’s offline play has remained consistent, with the brand’s online-offline share now almost evenly split 50-50, Counterpoint said, adding that the company is now being even more aggressive by raising salaries of in-store promoters and claiming shelf space in retail stores.
“The business model of being exclusively online-centric will soon be a thing of the past with every brand now focusing their energies to expand offline, including the likes of Poco and OnePlus,” said Sanyam Chaurasia, adding that the push is coming due to government scrutiny and their need to tap into higher price points for increased profitability.
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