OPPO and Vivo have each lost around 10,000 sales outlets in India after the two smartphone manufacturers decided to decrease the trade margins offered to retailers. According to a report published by the Economic Times, the two tech companies slashed margins they offer to large chains from 23-25 percent to 14-15 percent. On the other hand, smaller retail outlets also suffered a reduction in trade margins from 15-16 percent to 5-6 percent. Due to this decision, around 10,000 stores have stopped selling the handsets manufactured by the two device makers, and this number may rise in the near future. One of the retailers affected by the manufacturers’ decision is Sangeetha Mobile, which decided to discontinue retailing devices from OPPO and Vivo in the state of Tamil Nadu. Aside from the significant decrease in the trade margins, another reason that prompted the retailer to stop selling OPPO and Vivo devices in Tamil Nadu is the variation of trade margins that the two companies offer in different states, which makes it more complicated for outlets with stores across the South Asian country to sell the device makers’ products.
A spokesman for OPPO India stated that it had reduced trade margins offered to retailers due to the firm’s decision to focus its resources on marketing mid-range and higher-end products. Nonetheless, the spokesperson admitted that there has been a decrease in the number of outlets due to the impact of the goods and sales tax on the sales of some stores. Meanwhile, Vivo India denies reports regarding the drop in the number of stores, and it claims that it even plans to add more outlets in 2018. However, an executive from a retailer provided a different reason behind the margin cuts. The executive claims that the drop in trade margins is a part of the two companies’ strategy of decreasing investment once they reach a certain market share.
Researchers claim that the two smartphone manufacturers will face intense competition in India this year, and the decrease in investment may affect their market share in the near future. This may become a problem for the two tech firms, as industry analysts have previously mentioned that continued growth in the overseas markets is important for Chinese manufacturers. This is due to the saturation of the Chinese market, which reduces the room for growth for device makers. It is predicted that OPPO and Vivo will be affected by the market saturation since the two companies rely heavily on sales generated in their home market.
The post OPPO, Vivo Lost 10,000 Stores Each After Trade Margin Cuts appeared first on AndroidHeadlines.com |.
【Top 10 Malaysia & Singapore Most Beautiful Girls】Have you follow?
