Flipkart, Amazon defy FDI policy impact, witness significant rise in online smartphone sales

The new e-commerce FDI policy, which came into effect in February this year, proved to have no impact on online sales of smartphones.

Contrary to the expected outline, smartphone shipments from the online channel reached its highest ever share of 43% during January-March quarter of 2019.

Online channel shipments were mainly driven by a couple of factors including sales events, new launches and lucrative offers and led to around 17% year-on-year (YoY) growth, according to the latest research report by Counterpoint Research.

Homegrown e-comm major Flipkart captured about 53% share of the overall online smartphone sales. Rival Amazon also fought neck-to-neck growing 38% YoY to capture 36% of the online market.

Brands that contributed most for Flipkart online sales included Xiaomi, Realme, ASUS, and Huawei. Walmart owned firm Mobile Bonanza and Women’s Day Sale drove shipments, added the report.

Whereas for Amazon, OnePlus, Samsung, and Apple helped it capture 81% of the online premium smartphone segment. Flipkart contributed 17% of online smartphone premium segment

The top 5 brands grabbed 85% of the total online market.

Xiaomi alone captured around 43% of the total online market in the quarter. Its Redmi 6A, Redmi Note 6 Pro and Redmi Note 7 series drove volumes, contributing to almost two-thirds of Xiaomi’s total online sales. Six out of the top ten models were from Xiaomi. Redmi 6A was the best-selling device.

Rs 15,000-Rs 20,000 was the fastest growing price segment in the online market, driven by Xiaomi and Huawei.

The online channel will continue to hold significant importance in a price-conscious market like India, said Tarun Pathak, Associate Director, Counterpoint.

The report also defies the FDI impact on e-commerce giants. Instead, it seems to have suggested that e-comm firms have found a way to cope with it.

February implemented FDI policy barred e-commerce marketplace entitled for mandating any seller to sell any product exclusively on its platform. Besides, the policy had added that a single vendor on a platform cannot sell more than 25 per cent of the overall value of transactions, of a marketplace.

In case that single vendor is selling more than 25 per cent, then that will be considered as maintaining an inventory, which is against the FDI laws of the B2C consumer market.