If you are planning to buy a new smartphone then here comes the good news for you as smartphones expected to get cheaper in the month of June before GST starts in July. The brands and retailers want to sell the old inventory prior to implementation of ‘Goods and Services Tax’, as a result of which prices of the handsets would increase.
As per the analysts, some smartphones brands may offer huge discounts straight away to the consumer, via offline or online means, on the other hand, the retailer is also expected to offer handsets for less price to cut down the unsold stock. It has been also said that in end of June prices are anticipated to decrease by 10%.
Senior analyst at International Data Corporation (IDC) India, Navkendar Singh said, “June will be dry in terms of sell-throughs (sales to customers) and if price increase happens in July, discounts may be offered by brands starting mid-June till the month end, such that the old stock is cleared before models with increased prices start coming in.”
Industry body Indian Cellular Association said, recently, a council fixed tax rates on all goods and services in India and 12% rate is fixed on “telephones for cellular networks and parts for their manufacture,” due to which most of the phones will become expensive by 4-5% from their current rates.
It is pertinent to note that associate director at Hong-Kong based Counterpoint Research, Tarun Pathak while talking about GST and smartphone he said, brands have already begun to sell the stock to the distributors who are not actually ready to take them. Furthermore, trying hard to sell the old stock to the retailers because of the risk during the transit stage of GST and also told some of the feedbacks from trade channels.
The director also said, “So, we can expect discounts of 5-10% towards June-end by retailers because even they would not want to hold on to stock which may become expensive in a couple of weeks.” The period of May-June would witness fewer shipments as retailers want to sell the existing or old stock prior to new stock come into the market. Moreover, IDC anticipate a 10% cut in shipments in June month and July-September would be the more active quarter of the year. In addition to this, as this quarter comes just before the festive period especially Diwali in which heavy discounts or sales are offered to customers.
It is evident that recently, the top online retailers of the country such as Flipkart has offered big discounts on the sale of Smartphones. In conjunction to this, the companies have earned a large amount of profit from the sale. Sale period of Flipkart was between May 14 to 18, on the other side, Amazon sale’s period was between May 11-14. So, if you want to buy a smartphone buckle up your shoes as sale period for Smartphone will only last until June, prior to GST introduction.
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