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Mobiles, consumer electronics sale on e-commerce portals bounce back in May: report

Livemint:  July 05, 2017

New Delhi: Sales of mobile phones and consumer electronics on e-commerce portals bounced back in May, reclaiming ground they lost to the fashion category in January, even as combined online retail shrank 30% to $18 billion in May since demonetization, an analysis by research firm RedSeer Consulting showed.

In the months following demonetisation, sales of online fashion, which includes apparel, shoes and accessories, surged and later slumped, the report said.

The category accounted for 22% of all products sold online (in terms of value) in January, from 15% in October, owing to end-of-season discounts by major fashion portals and the emergence of an array of niche fashion websites like Stalkbuylove, Voonik and FabAlley, among others

In May, however, fashion sales went down to 18% of the total pie, as retailers (both online and offline) focused on clearing inventory of heavy electronic products and mobile phones in the run-up to the goods and services tax (GST) rollout on 1 July.

Some house-hold electronic items were put on discounts of up to 20%, leading to a surge in sales. As a result, the category recovered to pre-demonetization levels of 20% in May, after sliding to 18% in January.

Mobile phones, the largest selling category online, accounted for 52% of all product sales in May, from 49% in January, on the back of discounts and new launches, the report said.

Since December, Flipkart introduced at least 11 smartphone models from brand like Motorola, Samsung and Lenovo, exclusively available on its platform, according to data sourced from the company. bagged exclusive rights to sell Xiaomi’s popular budget models Redmi 4 and Redmi 4A, which are now being sold through flash sales.

A spokesperson for Amazon said smartphone sales for the company grew over 135% in 2016.

The category mix has changed to put mobile phones and consumer electronics on top, but concerns loom as the market hasn’t recovered from the post-demonetization slump.

From $26 billion in October last year, online retail sales fell to $16 billion in January and have only marginally recovered to $18 billion in May, RedSeer data showed. All the figures are annualized estimates.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.