“Mobile phone sales have decreased by about 30% year-on-year, and the industry is reducing production by 10% than originally planned,” said Pradeep Jain, CEO of Jaina Group, which makes smartphones. for several top brands in addition to retail sales of its own brand Karbonn. “Companies are focusing on disposing of stocks,” he said.
The executives of two leading contract electronics manufacturers demanding anonymity said that their mobile phone clients and even customers of lighting products were taking similar steps.
Prices of mobile phones and appliances increased by 9-15% per year
“Brands have become cautious and production is down 8-15% from the original plan,” said one MD.
Mobile phone sales began to decline from January to March, with researcher IDC India estimating that deliveries fell 5% from the same period last year and prices reached a lifetime peak. The researcher said that the maximum impact is in the price segment of 10,000-30,000 Rs, which makes up the majority of the market.
IDC India Research Director Navkendar Singh said that as demand eased, brands are expected to recalibrate their production plans.
- The outlook for demand for mobile phones and appliances for the next 2-3 months is declining
- Cos says the impact is greater for mid- and mid-level products and rural markets
- They fear that a large proportion of consumers may reduce their own spending
- The prices of electronic products have increased by 9-15% over the last year.
- Cos may postpone or mitigate further price increases if demand does not recover
“The supply situation is improving. However, unless demand increases significantly in the second half of the year, the overall smartphone market in India will face growth challenges this calendar year,” he said.
According to estimates, the prices of mobile phones, televisions, refrigerators and washing machines have increased by 9-15% over the last year due to rising prices for components, inputs and logistics.
This is at a time when the Russo-Ukrainian War and the widespread locks of Covid in China are affecting global supply chains. Agro-commodity, fuel and food prices are rising and banks ‘interest rates are also tightening, which, according to executives, has begun to affect consumers’ discretionary spending.
While the government has taken some steps to curb inflation, the industry says consumers will remain cautious in the near future.
Chairman Arvind Uppal said in a recent statement of the company’s earnings that the normalization of demand for Covid, together with high inflation in all areas, had damaged the durable industry. “Growth versus profitability needs to be balanced and recent government fiscal action should help mitigate the impact,” he said. However, Uppal added that the “turbulent period is not over” for industry.
Avneet Singh Marwah, CEO of SPPL, which makes the Kodak, Thomson and Blaupunkt brands, said that in addition to softening demand, the blockade in China also disrupted production plans, which may take 1-2 months before the brands re-expand to meet the festival. inquiry.