Apple, Samsung, Xiaomi And Other Consumer Electronics Makers Are Struggling To Meet Diwali Demand

A recent study revealed that a majority of Indian consumers have been saving up for big purchases, mostly smartphones and electronics, as well as fashion items, during the festive season.

However, according to a recent report, the demand for such consumer gadgets has outstripped supply just before the Diwali shopping season, with several popular products disappearing from the market.

Several best-selling models, including those in Apple's iPhone 11, 12, and 13 series, Samsung's Galaxy Fold and Flip models, television sets and imported appliances across popular brands, are either out of stock or inventories are low, according to retailers and industry officials.

The Economic Times reported that as per the industry executives, the deficit is 15 to 30 per cent of potential demand.

Strong sales over the Navratri period, spearheaded by marketplaces like Flipkart and Amazon, as well as brick-and-mortar merchants like Reliance Digital, Croma, Vijay Sales and Great Eastern Retail, have exacerbated the supply shortage.

Avijit Mitra, managing director of Tata-owned electronics retail chain Croma said: "Supplies continue to be unpredictable. It is actually more (in appliances) where chips are required, which means premium-end and imported models."

The Surge Was Expected

Earlier it was reported that according to a survey conducted throughout India by Bengaluru based ZestMoney, a Buy Now-Pay Later platform, 78 per cent of respondents claim they had been saving up for splurge in the coming weeks or months. A total of 3,800 people took part in the pan-India poll, with the bulk of them being millennials.

As per the poll, 62 per cent of them stated they wanted to increase their festive budget compared to last year. It was also found that smartphones and consumer electronics were the top two items on people's shopping lists.

At that time, Lizzie Chapman, CEO and co-founder of ZestMoney said: “Overall we expect a 3x year-over-year growth this festive season with demand across categories from electronics, home appliances, smartphones, and electric bikes.”

As per the latest report, the top e-commerce giants in India, Amazon and Flipkart had also predicted the rise, and vendors had stored up with more products far earlier, which is why the situation is apparently better on these platforms.

Given the high demand for iPhones, several top retailers and executives, including Apple, have stated that this is the worst-ever supply crisis for the company.

According to market analysts, Apple likely supplied over 2 million iPhones to India last quarter. But that did not help the company as Apple's own online shop now has a three-to-four-week delivery wait time for even two-year-old models like the iPhone 11.

Most of the iPhone 12 variants are now out of stock on Flipkart, while others have a week's delivery lead time. On Apple's own online store, the freshly released iPhone 13 Pro models are out of stock, with a delivery period of more than a month.

Similarly, Samsung India is also facing a challenging situation during this period. According to people familiar with the situation said that it has written an SOS to headquarters requesting more stock for the recently announced super-premium cellphones, which are currently imported from South Korea.

The Chinese smartphone maker Xiaomi, which is also currently the world's largest smartphone manufacturer, has informed a few major retail chains that there may be supply problems for the next seven to ten days.

A Xiaomi spokesperson said: "During the festive season, we have seen a tremendous increase in demand from consumers. Witnessing a steady increase in demand and keeping in mind the gap between demand and supply, we have been working with various vendors and are trying to do our best to supply as much as possible.”

Additionally, the spokesperson said: “To ensure we bridge the gap, we have been working towards expanding our local manufacturing capabilities."

Due to the scarcity of semiconductors, a critical component in electronic devices as well as in automobiles, the consumer electronics and smartphone industries have been experiencing severe supply constraints over the past few months.

In addition to increased global demand, shipping containers are in short supply as merchants and internet stores in Western countries prepare for Christmas sales.

According to Neeraj Bahl, managing director of BSH Household Appliances India, which supplies Bosch and Siemens appliances, the supply constraint is costing the company over 15 per cent of potential sales during Diwali. He said: "Most of our fastest-selling and imported premium range are out of stock, while even our India refrigerator plant production is affected due to component issues."

Meanwhile, Deepak Bansal, vice-president, LG Electronics India said: "Shipments are delayed and if demand further picks up during the next seven to ten days, the shortage will increase."