Demonetisation makes a huge impact on the smartphone sales in India.
It’s been a month since demonetisation was implemented. There are a lot of debates going on whether demonetisation was a wise step or a bad move. However, demonetisation has taken a toll on the sales of smartphones in India. The sales of the phones below the value of Rs.10,000 have taken a serious hit as majority of the buyers of these phones make the payment in cash. In the first couple of weeks of demonetisation, the sales of the smartphones fell by 90%. The online sales also dropped by 20-25%.The phones with a price range between Rs, 4,000 to Rs.6, 000 are the most affected as per the reports. It is said that the fourth quarter sales will witness a massive drop in the smartphone shipments. According to the reports issued by IDC, the smartphone shipments are expected to decline by 17.5% whereas the feature phone shipments are likely to suffer the decline of 24.6%.The demonetisation effect is more evident in Tier 3 and beyond cities as the small retailers in these places rely mostly on cash payments.
Fortunately, the sales have improved in the last few weeks and the dip is reduced to 60-70 %. Since the cash payment has become difficult, people have started to resort to other methods including Paytm to purchase the smartphones. At present, the 10% of the transactions are made in cash payments. The full recovery is not expected anytime soon as it will take considerable time to make up for this dip. However, the experts denied the speculations that the huge dip might put the smartphone business in danger. The director of Intex technologies, Keshav Bansal, commented that the smartphone sales will ameliorate in the next three- four months. At the same time, premium smartphones have seen a sharp increase in the sales after the announcement of demonetisation. Apple sold almost 1 lakh iPhones within the time span of three days. The analysts believe that the government’s decision to promote digital money will aid in increasing the purchases of the smartphones.