The mobile industry has seen a tremendous change in the past few years. On one hand, we have the established phone manufacturers demanding a premium price for their brand name, while on the other we have new entrants who have targeted the Indian consumers by selling their phones at competitive prices. This has resulted in a market shift as consumers are now more concerned about the specs and want to get the most value for their money.
Xiaomi, the Chinese manufacturer debuted in India with the flash sale model, where the devices were put on sale at a specific time and were usually sold out within a couple of seconds. The Xiaomi Mi3 was priced at Rs. 13,000 which had similar specs to the Nexus 5. The Nexus 5 was at the time, priced around Rs. 28,000. Despite the infant age of the brand, the pricing alone was enough to generate curiosity among the masses and that lead to the Mi3 being one of the most stalked about smartphones of the year 2014. According to Xiaomi, at one of their events, the reason they can afford selling their phones at a lower cost is because they sell them initially at a no profit no loss margin, and make profits in the long run when the components used for the phone get cheaper over the period of time.
Another interesting case study of the offline-online juggle has been Motorola. In the good old days, Motorola was competing against the likes of Nokia and Samsung for offline supremacy. It was post the takeover by Google that the new Motorola, came to India as an online exclusive brand. Motorola’s Online-Only move, coupled with great pricing and good quality of products, proved really successful when one of their products, the Moto G was sold out within 40 minutes and it wasn’t even a flash sale (it is muted that the inventory during the first stage of the sale was around 10,000 units). Lenovo, who traditionally used to sell their phones offline has also now started maintaining a Online-Only portfolio thus jumping onto the bandwagon and trying to attract more users.
If a consumer wants to buy a phone that sells exclusively online, there is not a lot of debate that he needs to participate in. But what about phones that are available both, online and offline? Does it make sense to go to a brick and mortar store to make that purchase or order it online from the comfort of our homes,sitiing on the couch munching wafers?
This is precisely what we wanted to answer and therefore, tried to find out the answer to this question by seeing the online and offline prices for the top 150 phones sold on Pricebaba. The prices which were considered for online and offline platforms are the lowest offered by their respective sellers. Below are our findings, and they do make for a very interesting reading:
Out of the top 150 phones as per Pricebaba, 94 products were cheaper online whereas 56 mobiles were cheaper offline:
Online Prices Breakdown:
Out of the 94 products which were sold online, we considered the lowest prices for each of the phone and below are our findings:
- 20 products were cheapest on Amazon
- 23 products were cheapest on Flipkart
- 51 Products were cheapest on Snapdeal
Thus making Snapdeal the cheapest online store. For example, on the day of creating this report, the Apple iPhone 6 Plus 16GB is cheaper online with a price tag of Rs. 50,900 listed on Snapdeal whereas the lowest price for the phone offline is Rs. 54,000 in Mumbai. The difference between this is Rs. 3,100 which is a considerable saving.
Offline Prices Breakdown:
Out of the 56 products which were sold offline, we considered the lowest local price for that phone from the city and below were our findings:
- 25 products were cheapest in Mumbai
- 19 products were cheapest in Bangalore
- 12 Products were cheapest in Delhi
On the day of research, we found out that the Samsung Galaxy S6 64GB is priced at Rs. 45,000 in Mumbai making it cheaper by Rs. 2,900 when compared to its online price of Rs. 47,900 on Flipkart and Amazon.
One of our findings suggests that the products which were available online were cheaper by Rs. 1148 on an average than their offline prices.
Also, among the top 150 phones which were analysed, we found:
- Samsung, Sony & Lava had more number of products which were cheaper offline.
- Other brands like Apple and Micromax had a majority of their phones selling cheaper online.
With the price difference present between the two channels it will be interesting to see if the difference broadens up or narrows down in the near future.
Report contributed by Nishant Shah, Ruchita Mahimkar & Sneha Sedani | Pricebaba.com September 2015