Discounts, offers on smartphones set to abate most inventory cleared due to huge festive demand

The period of sharp discounts and offers on smartphones appears to be over, at least for the time being. The tremendous response to online shopping sales this festive season has cleared off smartphone inventory in the market after two dull years of prolonged pile-ups, meaning that brands may not need to bring any major sales-push events this month, market trackers say.

They added that demand has been such that inventory cycles – or the typical time taken for a device to be sold after going on sale – this quarter had shortened to 5-6 days as compared to 15-20 days previously.

“We are not expecting any major sale events by brands this time because both Q3 and Q4 have witnessed good sell out unlike last year when channels had huge inventory pile-up and deep discounting continued throughout December,” said Tarun Pathak, research director at Counterpoint.

He said that there could be some offers on older and less attractive models towards Christmas and New Year but the scale would be smaller compared to last year.

For the last two years, festive season inventory pile-up for few models had lasted even for 3-4 months despite regular flash sales and price drops, analysts say. But, the pent-up demand created during pandemic lockdown has accelerated smartphone sales and wiped off inventory within weeks.

“Luckily for brands, the extravagant stocking up in the pre-festive quarter has fared out well this year,” said a research analyst at a consultancy firm. “Most of the fresh launches have been sold out in both offline and online channels. We believe now companies will take some time to build inventory again before coming up with the New Year sale in the first week of January.”

In anticipation of high demand for smartphones globally, companies had shipped record high around 54 million units in the July-September period. ET had reported that online retail sales had hit record highs during the current quarter accounting for almost 53% of smartphone sales. Offline retailers, however, said their sales have declined 25% on-year as brands diverted most stocks to online.