Phone companies sweeten retailer deals ahead of festivals

Top smartphone makers Xiaomi, samsung, realme, Vivo, and Oppo will provide higher margins and out-of-the-box incentives to retailers in order to push handsets in the run up to the make-orbreak festive season, which contributes around a third of annual sales for these brands.

they will also indulge in devices’ targeted marketing that have been unaffected by a global shortage of chips. these brands, to push sales, are offering Covid-19 insurance, retailers’ international trips and helping out with their household chores, such as plumbing, grocery shopping and electrical works. retailers say some brands are pushing models priced more than rs15,000, at the cost of lower-priced handsets due to inventory challenges.

executives at media and advertising buying companies representing devices and auto makers say there is no pullback yet on advertising spends though they will be shuffled in the festive months from september to December, a period which contributes about 40-50 percent of their annual ad spends. the festive season is an important time for the industry following a sharp dip in sales in the April-june quarter owing to the Covid-19 second wave, said a senior executive at one of the top-five smartphone brands. though demand has revived since then, the months ahead of Diwali will play a critical role in determining how the year pans out.

Faisal Kawoosa, founder of tech market research firm techarc, said, smartphone brands could see a 5-15 per cent shortfall in shipments in the lead up to the festive season.

However, brands will be selective about directing ad spends. they may spend on outdoor advertising only in select locations with higher footfalls. Ashish bhasin, Chief executive (APAC) and Chairman of Dentsu, said products that deal with chip shortages will not be advertised till supplies resume.n