Resellers buy almost half of smartphones online: Study, Technology News, ETtech


Resellers buy almost half of smartphones online: Study Smartphone purchases have long been considered a driver of online shopping among Indian end-users, but that may not be entirely true. While industry estimates show that almost 40% of the smartphone sales happen online, a new study by tech consulting firm techARC noted nearly half (40-45%) of this is in the nature of “reseller fraudulent” sale.

This refers to small- and medium-sized sellers (or called resellers in this report) purchasing smartphones in bulk from online portals and selling them in the offline market, and techARC says in the study this is hurting the entire smartphone ecommerce segment.

“With this volume of reseller fraud prevalent, the pure online sales contribution declines to 21-24% of the total smartphone sales,” the report said. techARC’s finding is based on interaction with retailers, distributors, logistics companies and others part of the value chain.

“Reseller fraud is modernday malpractices adopted by few, making the entire digital commerce of smartphones appear shoddy and shabby,” Faisal Kawoosa, founder and chief analyst, techARC, said.

E-commerce portals have technological controls restricting the number of units a user can buy, but retailers find a way around it using various techniques, he said.

“The flash sales of smartphones by e-retailers is a key area, where we see resellers buying at a discount and selling to end consumers — who cannot buy or miss purchasing the models online — at full retail price,” Kawoosa explained. E-commerce portals like Amazon, Flipkart and others offer special discounts on smartphones to attract end-users and create an online buying culture. However, under the reseller scenario, the benefit is taken up by other sellers.

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