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NEW DELHI<\/strong> : Refurbished smartphones and no-interest financing schemes spread over two years became the clear demand drivers for retailers in last week\u2019s Diwali sale, which were better than industry expectations, insiders said. The two factors combined to offer a silver lining for India\u2019s smartphone sellers, even as organic demand for smartphones continued to remain tepid at best in the second-largest smartphone market in the world.<\/p>\n<\/p><\/div>\n \u201cEven as other appliances categories remained flat, our Diwali smartphone sales saw a 40% year-on-year growth. The introduction of zero-interest, two-year financing schemes for smartphones was the biggest driver of sales, even as buyers continue to hold on to their phones for more than 20 months,” Nilesh Gupta, MD of electronics retailer Vijay Sales, said.<\/p>\n Kailash Lakhyani, president of industry body All India Mobile Retailers\u2019 Association (Aimra), said the zero-interest, two-year instalment plan was a driver of sales for small physical retailers, too.<\/p>\n In response to a query from Mint,<\/i> Ranjit Babu, director\u2014smartphones and televisions at Amazon India, said the platform saw 2.5x higher smartphone sales across the festive season, driven largely by \u201cno-cost financing and exchange offers.” Flipkart declined to comment on its Diwali smartphone sales.<\/p>\n For brands, a Xiaomi spokesperson said the company now expects the second half of the year to be \u2018significantly stronger\u2019 than H1.<\/p>\n Manish Khatri, partner at retailer Mahesh Telecom, said market stagnation among customers is a driving factor behind this. \u201cCustomers today regularly tell us that there\u2019s no compelling reason for them to buy new phones, and the quality of existing phones have also become very good. Hence, new purchases are no longer being driven by organic demand\u2014the only segment which is seeing such a demand is the premium smartphones market,” he said.<\/p>\n As a result, Khatri, and other retailers, are focusing on refurbished phones. A multi-brand retailer in Delhi, who requested anonymity, said over the past year, they added a refurbished smartphone outlet in their physical stores, driving sales in a weak year.<\/p>\n The market dynamic comes amid a sustained slump for the smartphone market. Upasana Joshi, research manager at market research firm IDC India, said the finance scheme was a key driver of sales for top retailers, and smaller retailers struggled in the budget segment.<\/p>\n \u201cThere is very little organic demand for smartphones, and the budget segment will remain nearly flat. The festive season saw decent demand in isolated phases, but that will be cancelled out in rest of the months of each quarter,” she said.<\/p>\n This, Joshi added, is likely to see the December quarter rack up 35 million smartphone units shipped\u2014up from 30 million units in the last quarter of 2022. However, even a better-than-expected last quarter of the year would not be able to prevent the domestic smartphone market from seeing a second consecutive annual decline. IDC reported 144 million smartphones shipped in 2022\u2014as a result, 2023 could see shipments either remain flat, or decline by around 1%.<\/p>\n Amid demand dip, the two-year finance scheme has helped retailers with growth\u2014Vijay Sales\u2019 Gupta said the chain\u2019s festive season premium smartphone sales were \u201cmore than 40% higher” than last year.<\/p>\n This market dynamic is a boon for refurbishers. Sourav Gupta, chief executive of used smartphone reseller platform Xtracover, said there has been a clear uptick in demand in the festive season. \u201cModels of the iPhone were in big demand for us, which saw the average price per device sold increase to \u20b9<\/span>11,000 from \u20b9<\/span>8,500. This is the season where we are organizing a largely unorganized refurbished smartphone market, driven by demand from buyers to get affordable devices\u2014and from individual sellers to sell their used devices at a better price than their local retailers. On average, this helps us keep a margin of nearly 15%, while festive sales have driven our margin up to 25%,” he said.<\/p>\n For large platforms such as Amazon, the exchange offers also add to their play in the refurbished smartphones space, which industry stakeholders said is helping organized firms such as Cashify and Xtracover to grow.<\/p>\n \t<\/p>\n Milestone Alert!<\/strong>Livemint tops charts as the fastest growing news website in the world \ud83c\udf0f<\/span> Click here<\/strong><\/a> to know more.<\/p>\n