The mobile phone category is in for a double whammy in the new e-commerce policy. On one hand the exclusivity prohibition will leave many brands scrambling to invest in new local channels and on the other, aggressive discounting on online platforms could be a thing of the past.
Sanchit Vir Gogia, Chief Analyst, Founder and CEO of Greyhound Research, said that the policy impacts Chinese brands like Xiaomi and One Plus, which primarily used e-commerce platforms to push their inventory. They will now have to look at investing fresh dollars in tier-2, -3 and tier-4 markets, where their partner base is “not that strong right now and in some cases, non-existent.” He said that this is “an area of deep concern” for such Chinese brands, while calling the policy a “spirit dampener” for online retail. However, now that aggressive discounting will be curbed, this policy is going to reduce the pressure on offline retailers to reduce their prices, said Gogia.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
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