Overall, smartphone sales are predicted to plummet upto 30% in March and further in April, analysts say.
“The question is who will you advertise for if people are not buying and how will you distribute the product if there is a complete lockdown in cities and states,” said Navkender Singh, research director at International Data Corporation (IDC), India.
Neil Shah, Research Director at Counterpoint Research added the pandemic will surely impact marketing budgets of brands as TV and digital ad slots will become expensive for next few weeks.
Industry experts say most of the advertisements for latest product launches would go to digital platforms such as video streaming apps which are seeing most traction these days.
“Smartphone brands have also increased TV ads since more people are at home and watching TV but with the upcoming sales approaching, it is unlikely to have a great demand even with deep discounting,” said Upasana Joshi, associate research manager at IDC.
ET has recently reported that even e-commerce marketplaces Flipkart and Amazon, where non-essential items make up over 70% of sales, are staring at a severe blow in the coming quarters.
Waning demand is a major concern for coming three-four months which will take a hit at companies’ toplines. While the BBK group which owns Vivo, Oppo, OnePlus and Realme may be able to absorb the losses others including Xiaomi would be shaken, Singh said.
Out-of-home advertisements such as billboards, hoardings and transits are already blank as companies are no longer honoring contracts with ad agencies.
“Losing a client like Samsung, Oppo, Vivo or Apple which markets its products every month across India means a loss of around Rs 13 crores to us,” said an agency executive who did not wish to be identified.
On the other hand, Chinese phonemaker Vivo stands to save Rs 440 odd crores if the Indian Premier League (IPL) gets cancelled this year. Vivo had won IPL’s title sponsorship last year in Rs 2199 crore for five years after defeating rivals Oppo, Xiaomi, Motorola and Intex in bidding.
“Bookings are being cancelled for projects such as airport advertising which is very heavy on expenditure,” said Dipankar Sanyal, CEO, Platinum Outdoor.
Pioneer Publicity which owns the naming rights of Delhi Metro stations, said that clients including phone brands aren’t showing interest and the agency is facing substantial losses on day to day basis since the last week.