Diwali sales may extend for mobile handsets

Subdued sales during Diwali left traders and vendors with huge inventory

Jatindar Chaddha, who deals in mobile handsets in Delhi’s Nehru Place, is not happy. This is in stark contrast to how Chaddha was usually found every year after the Diwali weekend, says his manager Ramesh Tripathy.

 After minutes of discussion over transfer of a few hundred feature phone devices — from Chaddha’s warehouse in the electronics hub to his peer’s – the semicentennial trader turns to me. “I don’t like these types of hassles even after proper planning and sales forecast. While some excess stock lie idle at times after Diwali, this year I am stuck with hundreds of unsold devices”, he said.

Like many others in the locality, Chaddha is now facing a challenge of selling the excess stock that they purchased during the run-up to Diwali, in anticipation of a bumper sales. While frequent footfall of buyers ensure steady sales round the year, increased crowd beginning a month ahead of Diwali usually spikes sales, which accounts for nearly 30 percent of the annual turnover. A subdued festive season this year, however, hampered offtake. “The only way to clear the stock now is to sell them at a lower price while every year we end up selling them at a premium”, Chaddha added.

Retailers with whom Business Standard spoke to were jittery. While some said that sales were almost according to expectations many said managing excess inventory is giving them headaches. According to Parminder Singh, who manages a prominent large format retail store in East Delhi, discussions are on at the management level with the manufacturers to find a way out. “Diwali season is over and Chhath puja is around the corner. But the kind of inventory we have at the company level, we won't be able  to clear them in next two months”, he said.

According to sources, major electronic retail firms like Croma, Mobile Store and Spice and distributors like Redington, Rashi Peripherals, among others, are planning to meet handset vendors to chalk out a plan. Offering post-Diwali discounts and/or running promotional schemes like bundled offers and freebies are the prominent options that are being considered. Such offers are not usual after Diwali but record import of smartphones and feature phones this year, followed by poor sales, has left vendors and traders high and dry this year. According to preliminary estimates from research agency Counterpoint Research, during the September quarter a record number of handsets were shipped in anticipation of bumper sales during festive season. 

Nonetheless, while the wedding season is still a few weeks away, another round of discounts and offers may only prove to be beneficial for consumers who missed out on Diwali sales this time.