Offline retailers begin to hang up on low-margin Realme

Leading cellphone retail chains, including the largest one Reliance Retail, are thwarting the efforts of the fourth largest and online-focused smartphone maker Realme to enter the brick-and-mortar trade by refusing to sell their handsets due to low trade margins, two senior industry executives said.

This is one of the first fallouts of the margin war between big retail and the consumer electronics industry in India, a phenomenon typically seen in the FMCG space, coming at a time when online-focused brands are trying to step into offline retail. Brands such as Realme have been selling through Flipkart and Amazon at lower margins due to lower cost of distribution, compared with offline trade. The executives said even chains in the South such as Sangeetha, Poorvika and Big C have decided not to sell Realme due to low margins. Realme had entered into a pact with Reliance for sale of their handsets through 600-odd stores last November.