Smartphone Cos Look for Omnichannel Balance as Online Demand Falters

Smartphone companies, including Motorola, Xiaomi and OnePlus, are increasingly moving towards offline channels of sales to drive demand in smaller towns. The move by these smartphone brands marks a significant decrease in their ecommerce bet, as shipments to online retailers nosedived for the seventh consecutive month in April this year. 

“Online channel shipments faced double digit declines for the second consecutive month. In April, it declined by more than 20%. Meanwhile offline channels have grown by more than 10%, marking the eight consecutive month of growth for offline, which also faced headwinds of low overall demand,” research manager, IDC India, Upasana Joshi said, according to the Economic Times. The overall shipments for the smartphone market were flat at around 12 million in April compared to March, marking another flat quarter for the smartphone market, she added.

This comes as the brands are realigning their strategy to hybrid mode and refocusing on brick-and-mortar stores. They are now eyeing for offline strategy to increase the distribution along with sustaining online momentum and offering various microfinancing solutions to make products more affordable, the IDC (International Data Corporation) mentioned on its website. 

In the first quarter of the financial year 2025, the contribution of offline mode of distribution increased by 10% YoY, and its overall share rose to 58.1%, while online channel shipments narrowed by 21.1% during the same period. The increase in the share of offline mode to overall shipments is mainly driven by companies' strategy to spread their footprints into India’s smaller towns/cities. It's not just these companies that are moving towards online mode. But companies that were earlier more dependent on online mode have also reduced reliance on online distribution. 

“This was the result of an ongoing omnichannel strategy by almost all brands, spreading footprints into smaller towns/cities, offering attractive channel margins and support, which should remain in the upcoming quarters as well,” the IDC stated.