Transition to the goods and services tax (GST) regime has severely hurt smartphone shipments, especially in June, analysts said. While Singapore-based market research firm Canalys said the country’s smartphone market contracted on year for the first time in the April-June quarter, with a 4% fall to 27 million units, Counterpoint Research said June sales were down 9% from a year earlier.
Counterpoint, however, has estimated a 4% rise in April-June shipments at 30 million units. Apprehension among distributors and retailers on GST’s impact on prices had caused the market to adopt a wait and-see policy. “Retailers and distributors were wary of changes, and adopted a wait-and-watch policy before resuming operations to 100%. Time was spent adapting processes to be GST-compliant, as opposed to selling more devices,” Canalys analyst Rushabh Doshi said.
“…there is general confusion in the entire market over GST and lack of awareness on changes needed.” Tarun Pathak, associate director at Counterpoint, said: “Sell-in was heavily impacted in anticipation of the GST roll-out during the later part of Q2 2017. Retailers were quite hesitant in adding new stock into the channels during June even though there was some assurance from the OEMs (original equipment manufacturers) regarding inventory clearance.”