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Phones sales rise in April, expected to heat up this summer

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In Short:

Online smartphone sales increased in April after a decline in March due to challenges faced by Chinese brands in expanding offline. The share of online platforms rose to 41% in April, with brands focusing on online channels over offline due to heatwaves reducing footfalls in retail stores. OnePlus saw a drop in shipments due to resistance from retailers, leading to an increase in their online channel share.

Online Smartphone Sales Surge in April after March Decline

New Delhi: Online smartphone sales saw a resurgence in April following a decline in the March quarter, as per market trackers. The share of online platforms in overall shipments rose to 41% in April, up from 39% in Q1 2024, driven by brands focusing on online sales ahead of summer promotions, according to Counterpoint Research.

Impact of Heatwaves on Retail Sales

Analysts predict that the trend of online sales overshadowing brick-and-mortar stores is likely to continue in May and June due to heatwaves in North and West India reducing foot traffic in retail stores. The June quarter is expected to see a slowdown in shipments compared to the previous quarter.

“The heatwaves in May and June, along with reduced footfalls in retail stores, have negatively impacted offline retail sales of smartphones. Customers have been prioritizing appliances like air conditioners and refrigerators over smartphones,” said Shilpi Jain, senior research analyst at Counterpoint Research.

Shift of Chinese Brands to Online Channels

Chinese smartphone brands looking to expand offline also faced challenges due to low stock availability and margins, leading them to focus more on online sales. For example, OnePlus saw a significant decrease in shipments in April as it faced resistance from retailers in the offline segment.

Due to this resistance, OnePlus saw a surge in its online channel share in April, increasing by over 70% compared to the same period last year. Similarly, Realme also witnessed a growth in its online channel share in April.

Focus on Offline Expansion

Xiaomi has maintained a balanced approach between online and offline sales, with the company now emphasizing offline expansion by increasing salaries of in-store promoters and securing shelf space in retail stores.

“The trend of exclusively online-centric business models is evolving, with brands like Poco and OnePlus now shifting their focus towards offline expansion to tap into higher price points,” said Sanyam Chaurasia, highlighting the industry’s shift towards offline growth for increased profitability.

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