How are Amazon, Flipkart and electronics manufacturers whetting shoppers’ appetites for the festive season?

Mass and corporate buyers will be the biggest contributors this festive season as the gifting concept kicks in with the arrival of Diwali

E-commerce portals bet on the holiday season. Amazon and Flipkart are providing discounts and cashback offers on a range of products from home goods to bulky electronics.

Amazon’s Great India Festival and Flipkart’s Big Billion Days coincide with sales by Samsung and Xiaomi in the gadget segment. Samsun is promoting a “No Mo FOMO” sale with offers on various electronic products, including smartphones. Xiaomi launches ‘Tech ka Shubh Muhurat’. Apple is also joining these companies with its own promotion starting Monday. Google has partnered with Flipkart to offer a discount on Pixel phones as it prepares to launch the next generation of Pixel devices including watches and headphones on October 6.

The appeal of 5G

According to research company Techarc, users are buying more devices, especially smartphones. Smart TVs, TWS headphones and smart watches were purchased as a result of lifestyle choices.

“With 5G rolling out in the near future, premium 5G smartphones and value-for-money 5G smartphones will top the list of consumer purchase considerations,” says Prabhu Ram, Head – Industry Intelligence Group (IIG), CyberMedia Research. (CMR).

In the premium Android segment, Samsung will be a key driver, said Navkendar Singh, technology industry analyst at IDC. He emphasized that Xiaomi will become the leading player, followed by Realme, Vivo, Samsung and Oppo.

“This year, there will be no significant change in total sales compared to last year as ASP (Average Selling Price) has increased,” Singh added. Sales of IoT devices such as headsets and wearables will be on the higher side as they have a short lifespan of around 6 to 8 months, he said.

According to CMR, the value-for-money (₹7,000-₹24,999) and premium (> 25,000) smartphone segments, especially 5G smartphones, are expected to see healthy potential sales. On the other hand, affordable entry-level smartphones will continue to face a major onslaught with limited festive sales as consumers in this segment are affected by changing economic conditions.

iPhones remain an aspirational purchase this holiday season. With the launch of the iPhone 14 series, the focus shifted to the iPhone 13 as there is no noticeable difference between the two phones.

“Apple will obviously remain a popular choice among premium customers unless they opt for an Android phone,” Singh said.

Macroeconomic background

This festive season, bulk and corporate buyers will be the biggest contributors as the gifting concept kicks in with the arrival of Diwali. Conversely, users of existing feature phones in the low-income bracket will find it difficult to upgrade and move into the smartphone ecosystem as ASPs have grown even as their incomes stagnate or decline.

Speaking to industry analysts, they confirmed that the situation is not good for entry-level buyers due to economic headwinds, while the premium segment has leverage to choose from. The e-commerce giants are still optimistic that sales will grow in 2022 despite the challenges. Amazon Business reported two-fold growth in business or bulk orders.

E-commerce portals have an advantage over individual players as they offer a relatively wide set of items to redeem cashbacks and promotional coupons/codes on other items as well. Schemes like BNPL (Buy Now Pay Later) and POD (pay-on-delivery) are kind of game changers in Tier 2 and 3 areas.