Smartphone sales: The online Vs offline war is heating up
The online Vs offline war is now out in the open, atleast when it comes to mobile retailers. In first such instance of breaking out of a full scale war between offline mobile retailers and online sellers, the All India Mobile Retailers Association (AIMRA), an apex body representing 1.5 lakh plus mobile retailers in India, is up in arms against their online counterparts.
The online Vs offline war is now out in the open, atleast when it comes to mobile retailers. In first such instance of breaking out of a full scale war between offline mobile retailers and online sellers, the All India Mobile Retailers Association (AIMRA), an apex body representing 1.5 lakh plus mobile retailers in India, is up in arms against their online counterparts. AIMRA has labelled charges of unethical, discriminatory and monopolistic business practices on online sales platforms, which, in turn, has landed them in great trouble. This assumes great significance in the wake of the new existential challenges being faced by the mobile retailers, who are burning midnight oils to work out a counter strategy and an action plan.
Mind you that the Indian smartphone market is estimated to be $38 billion. And Indian smartphone market is the biggest and fastest growing mobile phone market in the world. Some of the top global mobile phone brands have registered their highest shipments to India in 2021. Due to the fallout of the Covid impact, the online platform currently accounts for fifty per cent of the smart phone sales in India. That's when the problem began.
The foray of big cash-rich and technology-driven companies in the retail sector has thrown up new opportunities and challenges for the small retailers in the mobile phone sector. A new discriminatory environment has emerged in India where big players flout norms with impunity thus threatening the small retailers. Atleast that's what the physical retailer feel. They are well set to approach the Centre with a charter of demands to ensure the protection of over 150,000 brick-and-mortar mobile retailers across the country, who, according to them, are struggling to compete with the tech giants and unethical business practices by many online sales channels and portals. These small to mid-sized retailers are of the view that the government must formulate new regulations or at least strengthen the existing ones to stop unethical business practices by some of the big players. They demand that the government must step in to ensure transparency in business operations.
Then GST is another sore issue faced by these mobile retailers. The government must take steps to make GST norms easy for mobile retailers to understand and comply easily. The current GST regime remains a concern for small mobile retailers, who find it complicated and not conducive for doing business.
Over the last two years, Covid-19 had become a huge catalyst for the growth of online commerce, even bringing in new users from non-urban India. The convenience, cheaper prices, accessibility, and an array of choices offered by ecommerce platforms remains unmatched by offline shopping. The Indian ecommerce sector is expected to grow 21 per cent annually over the next four years, a 2021 Global Payments report states, buoyed by an acceleration in digital adoption during the lockdowns. Retailers who haven't undertaken technological transformations over the last two pandemic years are getting left behind - and the longer they take to digitise, the further back they fall.
However, with the world now seemingly returning to pre-Covid-19 life, a new hybrid commerce model is emerging that combines the power of online commerce backed by data analytics with offline stores, essentially helping them operate as a physical manifestation of their online experience. The mobile retail segment is no exception. Therefore, the government needs to take a balanced approach in facilitating a ceasefire between the two warring camps.