More than 37,000 mom-and-pop stores will either remain closed or halve workforce in Chhattisgarh, Maharashtra, Madhya Pradesh and Karnataka where the governments have announced seven-nine day lockdowns. This is expected to result in a 60-100% decline in offline sales during this period. Besides, consumer footfall in many areas has started declining as buyers hold back on discretionary spends and venturing out as cases rise.
“Offline shops will not be able to bear another round of shutdown in the country,” said Mukaddas Shaikh, president of Madhya Pradesh Mobile Retailers Association. “In MP, the number of shops has already come down from 8,000 to 5,000 so far and the pandemic is adding to the unfair treatment by brands who are diverting sales to their online partners.”
A Pune-based retailer said on condition of anonymity, “Business was already down 60% across 1,200 mobile stores in Pune as Maharashtra has been in a bad shape for long.”
Fresh lockdowns would mean a complete sales washout, he said.
After witnessing a record low market share of 49% in the quarter to December 2020 the offline smartphone channel had recovered speedily to almost 60% in the March 2021 quarter. On this basis, market trackers forecasted that the offline channel would capture 60% of overall sales after two years of steady decline. But the second wave of the pandemic could undo the strong recovery, pushing more and more customers to shop online.
“We have observed a healthy pickup in offline sales in the first quarter, led by aggression from brands like Vivo and Samsung,” said Shilpi Jain, research analyst at Counterpoint Research. “In fact, Samsung, which had become a leading online brand, sold almost 70% phones offline in the month of February. Our forecast is still optimistic because of the vaccination programme picking up in India, but the record-high cases are worrisome and can leave a major impact on offline if persistent for a longer time.”Offline sellers are also piqued by brands’ preferential treatment of online portals which impacted business in March.
“Two fast-selling models, the Redmi Note 10 and Oppo F19 series, which were launched in March were not billed to even a single retailer for almost 15 days whereas brands are posting record sales numbers,” said Ravi Kumar, president, Karnataka Mobile Retailers Association.
The handset makers, however, said they treated both retail channels equally.
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