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July Smartphone Sales Down 30-40% Due To Import Hurdles And Production Delays

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The custom clearance delays which started in June may pursue to impact sales throughout July.

By Lakshay Jain - 
14th Jul 2020
Mobile Business down by 40%

Highlights of the Story

  1. The shortage of new smartphones due to inefficient supply chain management may result in 30%-40% fall week-on-week sales in July.
  2. Manufacturers to face import impediments followed by production delays. 
  3. Amid to Anti-China sentiment, the government started 100% checking of Chinese cargo at the ports and airports further delaying the procedure.

Recently the Indian market has observed a shortage of smartphones due to supply chain impediments that have resulted in a 30-40% fall week-on-week in sales in July. The reason reported is that the manufacturers have to face import constraints which are followed by the production delays.

Also Read: iPhone 12 To Be Costlier Than iPhone 11 Despite No EarPods Or Charger, Analyst Claims 

Two smartphone market tracking organizations, Counterpoint Research and International Data Corporation reported that both the online and offline channels of sales are short of stock of the recently launched and “available for sale” smartphones for almost all the companies. Furthermore, they added that the rollover impact of custom clearance delays which initiated in June may extend to impact the sales of July. One of the leading shipment carriers agency has revised its April-June Shipment analysis, concluding a downward leaning graph from 16 million units which were predicted earlier. 

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The research director at Counterpoint, Neil Shah explains that a standard process of shipment of core material required, their assembly, and distribution takes approximately three-four weeks on average. Regional lockdowns will lead to furthermore delays in each process. 

Adding more delays to the situation, the government of India has strictly made it essential for the inspectors to make sure 100% manual checking of Chinese cargo at the ports and airports adhere between June 22-30. This led to a 10-day backlog in supplies of smartphones and their parts.

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Associate research manager at IDC, India – Upasana Joshi said “Supply constraints continue to prevail with components stuck at the ports, especially for China-based vendors, and factories still running at less than half the capacity. The situation will take longer to improve than expected earlier, with supply bottlenecks clubbed with anti-Chinese sentiments.”.

Renowned south India mobile phone retail brand ‘Sangeetha Mobiles’ claimed 90% recovery in business in May-June compared to the pre-COVID statistics of sale and further smartphone sales got down in July by 40% compared to previous months. 

Chandu Reddy, director, Sangeetha Mobiles said, “Last two months the pent-up demand was high which is now tapering-off, and of course, supply has never been regular since COVID happened. We are told by most brands that fresh stocks will be provided in a week or so.”

Adding more evidence to the subject, Nilesh Gupta, founder of electronics retail brand Vijay Sales, said “availability of smartphones in northern India was still better as most of the smartphone factories were in that region, and transportation was easier. Overall, though, We can fulfill 70% of the demand wherever stores are open”.

Sales tracker GFK India’s managing director – Nikhil Mathur said, “there is optimism for the market to positively pick up during October-December festive months. Our studies show Indian consumers are relatively more optimistic as compared to other parts of the world. Some of the technical consumer product purchases are likely to get postponed, but consumers may not cancel them.”

The trackers have reported that due to ongoing pandemic, jobs layover and salary cuts have made even the potential customer postpone their planned purchase, thus companies are unable to ramp-up production impacting the supply of model. The growth of the smartphone industry is expected to happen during the October-December festive period.

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