People are no more interested in buying smartphones online, thanks to fewer discounts

The first half of 2016 saw a huge fall in the number of smartphones purchased online, while last year, it had become sort of a trend for customers to buy smartphones from websites or mobile apps.

The reason behind this drop could be cited to the strictness induced in e-commerce rules in March this year, because of which there are fewer discounts offered on these websites. After the government passed new rules for 100% FDI in the retail sector, it prohibited e-commerce players to directly or indirectly influence the prices of goods or services on their platforms, in a bid to benefit the offline players. This took away the liberty of these online platforms to offer heavy discounts on their products, one of their main attractions.

Other than that, several brands, which only used to sell online, like Xiaomi, LeEco and Micromax's Yu Televentures, have also decided to sell devices offline, says Counterpoint Research.

As per the research, the share of online smartphones sales dropped to 32% for the first six months of 2016, as compared to 37% from last six months of 2015, and 28% in the April-June quarter of 2015.

However, in the first quarter of 2016, online sales accounted for only 33% of overall phone sales.

The new trend of buying phones offline can be expected to "continue as vendors realise the importance of setting up robust offline distribution network," as told to ET by International Data Corporation's (IDC) senior research manager Navkendar Singh.

However, e-commerce majors Amazon and Flipkart have challenged the data from Counterpoint Research, saying that there is no such fall in the online sales of smartphones, which have remained strong on their platforms.

"Smartphones is one of the fastest growing sub-categories, witnessing over 48 per cent (QoQ) growth in 2016. In June this year, smartphone sales doubled as compared with January," said an Amazon India spokesperson.

Ajay Yadav, VP for mobiles at Flipkart, said that, "share of online sales in smartphones has increased by 2 per cent in the last quarter as compared to December 2015 as per our estimates."

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