Shut Oppo factory gets China companies into trouble

New Delhi: Chinese handset firms Oppo, Realme and OnePlus are finding it difficult to meet the pent-up demand in both online and bricks-and-mortar channels following the shutdown of the Oppo factory in Greater Noida.Channel checks revealed Oppo and Realme’s sub-₹15,000 smartphones are largely unavailable in both offline and online channels.OnePlus, a premium smartphone brand, had postponed the open sale of its latest flagships — OnePlus 8 Pro and OnePlus 8 — in India after production at the Oppo factory was halted. The company, however, started a limited sale of these devices in India with limited units. “Due to unforeseen circumstances, production was temporarily halted earlier in May, and altered our sales plan. Having said that, production has already resumed,” an OnePlus spokesperson told ET.Oppo, the contract manufacturer for Realme and OnePlus in India, had to halt production at its factory as some employees tested positive for Covid-19. An Oppo spokesperson, however, said the factory hasn’t started operations but did not respond to other inventory-related queries.“There is a pent-up demand in the market right now. As the supply chains are disrupted at the moment, it is challenging for us to meet the full demand in the market currently,” a Realme spokesperson told ET. On inventory shortage, the Realme spokesperson said the company is working with distribution partners across India to fill the stocks at retail points.“During the lockdown period, we have strengthened our micro-distribution model and are very confident of ensuring supply to retailers in the fastest possible time. This will cater to tier II-V towns and below,” said the spokesperson.Queries sent to Oppo and OnePlus did not elicit any response.“Handset models which were nearing the end of life are being bought by customers in the absence of new models from Oppo, Realme and even Xiaomi. Samsung and Vivo had inventory which they are selling now and are getting results,” said a leading retailer, who did not wish to be identified.Another retailer said there is a huge demand for entry and mid-range phones, as consumer spending has been curtailed.“The market is largely in ₹12,000-15,000 range, but there is no stock available. The problem is with all the brands, be it Oppo, Realme, Samsung or Xiaomi. There is a demand for Samsung M series, but stocks are insufficient,” said Arvinder Khurana, national president, All India Mobile Retailers Association. He said sales in ₹15,000 and above category used to be supported by financing schemes, but that is no longer happening and, hence, there has been a decline in demand. “Financing is not streamlined because of past payment issues,” said Khurana.Margin is merely 3-4% in the sub-₹15,000 segment and given lesser demand in other price segments, he said, “20% retailers will need to shut shop in the absence of any government support.”

from Economic Times https://ift.tt/3cFfGSF