Online mobile selling an opportunity, but a challenge in Pakistan

The impact of Covid-19 and the subsequent lockdowns turned out to be devastating for the mobile phone industry that fell short in the sale by millions of units in the first quarter of 2020, the biggest after 2013. A 13% global dip has been observed from last year, as reported by Canalys. IDC reports it around 11.7% YoY decline, and similarly, Strategy Analytics finds the global industry plunged by 17%. 

The bigger economies where strict lockdown was observed also maintain a considerable share of online mobile selling. In China, where mobile phone sales plunged by 22% in the same period received tremendous support from e-commerce stores like Alibaba, Jingdong, and several others.

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Analysts believe the expected loss due to the outbreak was diluted to some extent due to the e-commerce stores in China.

The situation isn’t going to get better any time soon. TrendForce, a market intelligence firm, predicts the second quarter (Apri – June) to witness a 16.5% lower sales to 287 million units than the previous year’s figure.

The firm foresees a yearly production of 1.24 billion units in 2020, an 11.3% dip year on year basis.

Looking at the hurdles ahead, smartphone manufacturers have started pulling up the socks. Samsung has taken alternative measures and brought online some 20,000 retailers in India for delivering devices to nearby customers since e-commerce deliveries are still not possible in India owing to the restriction on non-essential items.

The situation in Pakistan is a little more complicated and a continuous hit in the second quarter may be higher in percentage than other markets in the world. The country hugely relies on the offline retail network with online mobile selling limited to only 8% to 10% of the total monthly volume that hovers around one million units, including feature and smartphones.

online mobile phone sales
A shopkeeper sells mobile phones and accessories outside Hafeez Center, Lahore during lockdown
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The market has been struck badly due to the lockdown where on one end, new launches have been delayed, the depreciation on in-trade stock and lost sales have pushed brands to devise alternate plans.

Vivo that possesses an 18% share in the smartphone market of Pakistan, as per GFK, is among the most affected mobile brands.

“The sales have been affected for sure; however, we are working closely with our business partners to minimize the impact. For that, we have started online booking on our official website, where we collect the orders from all over Pakistan and then using our distribution network. With the help or partners we are offering delivery services to our customers”, Vivo Pakistan’s Brand and PR Manager Muhammad Zohair Chohan shared.

Huawei believes that lockdown in Pakistan shows a tremendous opportunity for e-commerce stores as online mobile selling can become a decent alternative in the future.

“The lockdown created an unprecedented situation for the entire smartphone industry and the market at-large. But, it has also given rise to a never-witnessed-before need for online selling platforms. While we are expecting a boom in e-commerce activity, we believe that the market has to cater to consumers in duality – both through offline and online mediums. For now, online selling and home delivery options seem like a plausible solution. However, these options will see more growth and acceptance in the days to come. We have already seen a spike in our sales through Huawei Flagship Store at Daraz, so online selling does look promising”, Huawei Pakistan’s Country Manager Scott Huang said while talking to phoneyear.

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Imran Saleem, Director Commercial at Daraz, thinks the situation is getting better after relaxation in the lockdown from the government.

“During the initial lockdown stages where non-essential business was banned, sales were low. However, as soon as our sellers were allowed to sell online, we saw a huge uplift in overall electronics and especially in phones with sales going up to thrice over a normal day”, Imran commented.

A recent relaxation on the lockdown situation from the government has shown a very positive trend at the end customers who are more than willing to visit markets for buying new phones. On the very first day after the lockdown was eased conditionally, the local electronics and clothing stores witnessed an unprecedented presence of the customers. 

However, the situation could change in the coming days since several corners within the government, including the health community, suspect the rise in coronavirus spread owing to crowded areas in the local markets.

Despite the prospects, online mobile selling offer in Pakistan, a huge chunk of consumers is still reluctant to order phones on an e-commerce store.

Daraz realizes the fact that consumer’s confidence is still a significant hurdle. By and large, a lack of trust in purchasing high ticket items remains a hurdle in the customer’s mind. What if whoever is selling tries and swindles me? Do I want to risk my hard-earned money?

Although the online store has successfully tackled this problem by partnering directly with all brands available across Pakistan, the dependence on cash on delivery and the absence of online seller’s reach in far-flung areas of the country still does not minimize the gap between offline and online mobile selling.

Almost 30K retail shops across Pakistan cover the smartphone market. With the ever-changing situation after the Covid-19 in the country, the offline channel may face certain limitations and restrictions from the government in the shape of precautionary measures and new SOPs that will keep putting pressure on the sales. It is high time for the stakeholder to devise a strategy that could educate the buyer and the seller on the benefits of e-commerce.

Holistic and healthy e-commerce is an emergent need at every stage of the shopping experience. Customers need a replacement for shopping malls, electronic plazas dedicated to smartphones, and price comparison has become an essential part of shopping online. To provide relief from these pain points and increase sales for consumer goods in Pakistan, an intelligent search engine such as Shopsy can quickly adapt to the needs of its users, providing consolidated, accurate results from over 100 plus online stores.

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