Offline smartphone retailers in India experienced a significant downturn during the 2026 Diwali festive season, with sales volumes plummeting by 18-20% year-on-year. The All India Mobile Retailers Association's (AIMRA) Diwali Retail Performance Report, cited by Moneycontrol, highlighted that despite consistent footfall, many shoppers refrained from purchasing due to escalating prices.
The slowdown was particularly acute in the affordable segment, where devices priced below ₹15,000 saw consumers opting to retain their current phones or consider refurbished alternatives instead of paying more for new models. This cautious behavior was evident even in the week leading up to Dhanteras, when sales volumes had already fallen by nearly 40% as consumers awaited better festive deals.
Key Factors Behind the Sales Decline
Several factors contributed to the subdued demand:
- Increased Component Costs: Rising prices for memory chips and other smartphone components directly translated into higher retail prices across all categories.
- Uneven Discounts: Larger retail chains, often with older inventory, could offer discounts of 12-15%, which smaller, independent retailers struggled to match.
- Online Price Discrepancies: The persistent difference between online and offline prices led some consumers to visit physical stores for product inspection before purchasing online, further impacting offline sales conversions.
Interestingly, approximately 60% of festive smartphone purchases were facilitated through EMI schemes, underscoring the vital role of installment payments in managing upfront costs for consumers.
Brand Performance Varied
The impact of the sales decline was not uniform across all brands. Realme, for instance, reported a substantial drop of over 50% in offline sales volumes in several regions. AIMRA attributed this to higher pricing compared to competitors, fewer new product launches, and less appealing festive offers.
Conversely, the premium segment, specifically devices priced between ₹30,000 and ₹60,000, saw robust demand. Apple witnessed continued interest in older iPhone models (including the iPhone 15, 16, and 17) where pre-price-hike stock was available, as well as its latest iPhone 18 Pro and Pro Max. Motorola and Xiaomi also recorded healthy sales, while Google Pixel gained traction in the premium market.
Outlook and Industry Calls
AIMRA has issued a warning that offline smartphone sales volumes could contract by as much as 50% over the next three months as the post-Diwali festive demand cools. The association is advocating for more consistent pricing strategies across both online and offline retail channels, alongside a greater availability of affordable 5G smartphone options to stimulate future demand.