Chip scarcity to affect smartphone supply

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Due to a lack of chipsets, retailers are stocking up on mobile phones like never before as they prepare for a severe supply constraint over the holiday season. Others are expanding their stock rules from 21 days to 30 days. Insiders in the business predict traditional stores to be impacted harder than their online counterparts, as brands are seen shifting a majority of their remaining goods online.

Both online and offline retailers would be affected by component shortages. However, more customers will rush to e-commerce sites knowing that they may not find many alternatives in the stores. There’s a 60-70 percent chance the model you want won’t be in the shop, but it will be accessible online. Holiday sales account for around one-third of all annual sales for both brands and merchants.

They claimed supply chain difficulties might have a direct impact on their annual sales objectives. While IDC predicts that smartphone shipment growth will be in the low single-digits in 2021, other analysts believe that smartphone shipment growth will be flat in 2021. As a result of the larger companies’ concentration on the metro areas through their stores and huge retail outlets, clients in Tier II and III will be affected, according to another retail chain retailer.

Although the online and offline marketplaces in India have reached a point of parity, Covid-19 has pushed people towards online purchasing, as seen by the recent development of e-tailers in the phone industry in India The All India Mobile Retailers Association’s national president, Arvinder Khurana, claimed that many manufacturers, like Xiaomi, have a business strategy of launching new products only online, and owing to shortages their new products don’t reach physical stores for very long.

According to him, “online exclusivity arrangements with phone makers are a contributing factor to this issue”. As a result of the recent shortages of Samsung, Oppo, Realme, and Mi, there may be a scarcity in the future. Xiaomi, on the other hand, rejected AIMRA’s accusations, saying it had “balanced attention”. Offline sales for the country’s largest phone maker are increasing gradually as a result of several new initiatives. 

According to the firm, this festival season will be a good time to stock up on supplies. As a result of pandemic and component shortages, “all participants in the sector are suffering supply problems,” stated the spokesman. During the holiday season, which now typically begins on August 15 and lasts until December, the conflict between online and offline channels becomes more pronounced. 

A research analyst has pointed out that all channels will be challenged, but offline shops will have a harder time. It has affected electronics, cellphones, and the car sector. Experts predict that the worldwide semiconductor shortage will persist through 2022, resulting in higher pricing and supply chain constraints.

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