As pent-up demand has run out in larger cities and consumers have diverted their spending to travel and eat out for consumers in smaller cities and rural areas, overall inflationary pressure has consumed their discretionary spending.
“Discounts are back in the limelight and will continue into the holiday season as brands need to create demand and grow their business,” said Pradeep Jain, chief executive officer of Jaina Group, which retail Karbonn and Sansui brands.
The discounts had disappeared during Covid’s peak years, when supply was severely affected by supply chain disruptions, several industry executives said. The normalization of supplies had been accompanied by an increase in consumer demand. But sales of smartphones and TVs have slowed since the January-March quarter, while appliances such as refrigerators and air conditioners have seen a slowdown in sales since mid-May.
“The online discount will be high until the holiday season, with several brands experiencing strong sales and inventory build-up,” said Avneet Singh Marwah, managing director of SPPL, which manufactures the Kodak, Thomson and Blaupunkt brands.
Industry executives said Amazon Other flip the paper they have some sales scheduled until August with Amazon’s flagship Prime Day sale scheduled for late next month. The first and largest online sale of the holiday season is scheduled for the last week of September.
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smartphone and electronic products will be the target segment during the sales period, industry executives said. Even in the ongoing monsoon sales, discounts on these categories are back in vogue. Emails sent to both Amazon and Flipkart went unanswered.
However, executives like Jain from the Jaina group warn brands are under too much pressure due to the high cost of inputs and the extended discount period may not be sustainable.
Haier India president Satish NS said there was a drop in sales after April when the heat wave pushed demand. “The decline in sales is most acute in the entry and mid-segment, with some impact on the premium segment as well, which is still doing quite well. But the discounts are back as platforms are under pressure to increase numbers over a period. of boredom, “he said.
Researchers such as IDC estimate that the smartphone market will experience flat or low growth from January to June, while Counterpoint Research has revised its annual shipping growth projections from 14% to 10% during the same period.
Tarun Pathak, director of research at Counterpoint, said smartphone brands currently have around 8-9 weeks of inventory, 30% more than normal levels, prompting brands to clear inventory ahead of crucial holiday sales.
IDC India Research Director Navkendar Singh said that for even medium-digit growth in the smartphone market this year, there needs to be decent growth in the second half of the calendar year. This, he says, will only be possible when brands promote discounts and other accessibility schemes.
India’s largest smartphone maker, Xiaomi India spokesperson, said the company has created various sales events over the years that it will continue to build on. The person said that supply chain disruptions after the pandemic impacted the price of the products as components such as chipset, battery, memory chip saw a steady rise in price.