The mobile phone category’s contribution to e-tailers’ gross sales, or Gross Merchandise Value, fell in the first quarter of 2019 due to demand saturation, reduced discounting, and policy changes, RedSeer Consulting has said.
The first quarter also saw few exclusive launches by mobile phone companies, which also led to the decline in sales, sources said.
Between January and March, the share of mobile phones fell to 38% from 45% in the year-ago period. The share of mobiles in e-commerce will remain at around 35% for the entire year, RedSeer predicted.
Flipkart and Amazon are the two largest internet companies that sell mobiles online.The growth of GMV in absolute terms also dropped as a result, with only 8.5% growth to $6.4 billion in the first three months of the year. Last year, GMV grew 28% to $5.9 billion.
“This change bodes well for the whole ecosystem for horizontals as it indicates a clearer path to profitability, with a GMV composed of higher margin non-mobile categories. For verticals, the growing comfort with non-electronics helps them increase their total consumer base and attract buyers by offering a better experience,” according to the report.
Categories like home, business, and general merchandise continued to grow, owing to wider selection, and superior shopping experience, according to the firm.
Flipkart chief executive Kalyan Krishnamurthy said earlier that home, general merchandise, women’s apparel, mom and baby categories are growing faster than highly penetrated categories like mobile phones and consumer electronics.
“Our belief is that in certain categories, including home, general merchandise, women’s apparel, mom and baby categories, and appliances, the market has been growing at 60-70% last year,” Krishnamurthy said in an interview to ET.