"March Is Looking Bleak" - Supply Constraints Strike India's Tech Sector
It was only a matter of time before smartphone and other electronic shortages from top brands, including Apple and Xiaomi, were seen in India amid supply chain disruptions in China. Many of these companies have production facilities in China, with factory output at half to idle speed because of the Covid-19 outbreak.
The Economic Times (ET) says supplies of made in China smartphones and electronics are dwindling at Indian shops. Suppliers told ET that in the last 7-10 days, only 10-20% of the average shipment had been sent to stores.
Supply disruptions have mainly hit iPhone X models, due mostly because iPhone XR and 7 are locally manufactured. Suppliers noted that TCL and Xiaomi smartphones and televisions from China are in short supply. Shenzhen-based Realme was another brand that was facing shipment delays to India.
ET said shortages of high-tech goods had forced many retailers to stop offering discounts in the last several weeks. There's also reports that some prices of smartphones and TVs rose 10% last month due to manufacturers resourcing components, which has driven up overall costs.
"There are supply issues for several brands. There is no clarity when the situation will normalise," said Nilesh Gupta, director at Vijay Sales, a top electronics retailer in Mumbai and New Delhi. "If it doesn't get corrected fast, we may move into a stock-out situation from next month."
A Xiaomi India spokesperson told ET that supply chain disruptions in China are expected in early March. "We are working towards balancing the demand in India, which should be met soon," the spokesperson said.
Indian retailers have been building inventories of smartphones, television, air conditions, washing machines, and refrigerators since supply constraints developed in China last month.
A senior executive of an Apple exclusive store chain warned that supplies would normalize by April because much of the production is being routed to the US and Europe. "Business is down by 50% last week and March is looking bleak," he said
The virus has gone global, now affecting South Korea and Japan, two top manufacturing hubs of electronic companies that have had some multinationals idle or close some plants because of the virus outbreak.
What's coming down the pipe for the US is much of the same supply constraints seen in India at the moment. Major retailers, such as Target and Walmart, could experience shortages of products starting later this month or in April. Amazon has already warned several products could be "unavailable" in the weeks or months ahead.
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