Smartphone buyers can get discounts and attractive offers soon. In fact, the top 5 brands are busy extracting their online and offline inventory. Analysts say that the maximum pressure of inventory is being placed on the shopkeepers. Their excess inventory problem may persist till the end of March. Industry watchers said that Xiaomi, Realme and Samsung, which are focusing on online and offline sales, have not been able to finish the stock of the old models in the December quarter, but there is no shortage of new device launches from them. Brands such as Vivo and Oppo, which sell products exclusively through shops, are also facing this problem, but there is less pressure on them.
Offline channel sales will remain sluggish
However, Xiaomi and Realme have denied that they have too much inventory. The answer to questions asked about this was not received by Samsung, Oppo and Vivo till the time of writing the news. Upasana Joshi, associate research manager (client devices) at market intelligence firm IDC, said, “For the past few quarters, both offline and online channels have had a high level of brand stocks. This stock can last till the last quarter of the current financial year, ”he said, adding that the issue of high inventories remains throughout the year. The brands priced the old model within a month of the launch of the new product. Joshi said, “Due to heavy discounts, offers and cashback on online platforms, offline channel sales will remain sluggish.”
Better conditions than last year
Tarun Pathak, Associate Director, Counterpoint Research, while pointing out that Smartphones’ inventory is high, said the situation is better than last year. He said, “Most of the five big brands were being cautious about sell-in (units sent from manufacturer to retailers after production) this year. They were keeping a close watch on the situation. Pathak pointed out that it would be easier for handset brands with a good hold on online platforms to reduce inventory, but brands selling products through stores would face challenges. He said, ‘Old models that do not sell much, try to remove them with a price cut. It is easier to extract inventory by reducing prices for online brands such as Xiaomi and Realme than brands selling smartphones through stores.
Inventory level of Xiaomi at lower level
However, Muralikrishnan B, Chief Operations Officer of Xiaomi India said that the inventory level of the brand is at a low level in the last few quarters. Actually, he plans to increase supply and manufacturing to meet the demand. Madhav Seth, CEO of Reality India, has also misunderstood the increase in inventory pressure. He said that the brand produces stocks according to demand. Seth said, “Our old models were also sold out quickly”. Joshi of IDC said that in the festive quarter i.e. the third quarter of FY 2020, smartphones had the highest ever shipments, but though the actual sales were ‘quite low’, the inventory level would be higher in the next two quarters.