“This can potentially impact prices to some extent,” said Navkender Singh, research director at International Data Corporation (IDC), India. “Since the offline operations costs are relatively higher than online, brands will be forced to match the offline and online prices. We should expect some fast-moving models to get price correction in online.”
Mobile phones often cost Rs 2,000-3,000 less on e-commerce channels than in physical stores owing to exclusive deals with handset brands. Currently, e-commerce channels account for nearly 40% of overall sales of smartphones while bricks-and-mortar stores sell the bulk of handsets, according to data from TechArc Research.
Amid increasing pressure, though, several handset makers, including Xiaomi, Samsung, Vivo, Oppo and Realme, have expressed their intentions to end exclusive online launches and bring price parity across their sales channels.
“Vivo, Samsung, and Oppo, which are heavily entrenched towards their offline channels, will pour fewer discounts online as deals become less lucrative,” said Neil Shah, research director at Counterpoint Research.
Chinese phone maker Vivo gave a written assurance to its retail partners last month, promising to ensure simultaneous launches of the same product at the same time and at the same price.
Madhav Sheth, Vice President, realme and Chief Executive Officer, realme India, said its models won't see any price increase.
\"As a brand we are already offering same price at same time for our products for all customers across platforms including online and offline. We launch our products on the same day for the customers on both online and offline platforms, as we believe there should be no disparity between the customers purchasing from any particular platform,\" Sheth said.
He added that there won't be any increase in the pricing of smartphones because of online and offline disparity as the market is getting more competitive which will be beneficial for the customers and they will get enough options to choose their desired product.
Queries emailed by ET to Xiaomi, Samsung, Vivo and Oppo remained unanswered till press time on Tuesday.
Handset makers need to strategically address agitations over online discounts and devise ways other than pricing to attract and retain customers, said IDC’s Singh.
“Smartphone brands would need to dovetail their market strategies with an omnichannel perspective, and to be better able to cater to different consumer personas across both online and offline,” said Prabhu Ram, head of Industry Intelligence Group at CyberMedia Research.
However, pricing parity will not impact smartphone<\/a> sales, said experts.
“The sales in particular channel will be impacted but overall, if the product is good, sales won’t be impacted because now it is available at all points at the same price,” said Shah.
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