Demonetisation is set to bring a considerable slowdown in the PC and mobile devices market in the fourth quarter of this year and the impact will be seen more in smaller cities where more transactions happen in cash, a report said on Friday.
According to the market research firm International Data Corporation (IDC), "the significant slowdown of demand across PC and mobile devices is not just in offline retail but in online channel as well, where cash-on-delivery (COD) contributes to a substantial portion of the sales.
"In the third quarter of 2016, smartphone and feature phone shipments were 32.3 million and 39.9 million units, respectively. In the fourth quarter of 2016, feature phone shipments are likely to decline sharply by 24.6 per cent and smartphones are expected to see 17.5 per cent decline sequentially," said Jaipal Singh, Market Analyst, Client Devices, IDC India, in a statement.
The impact of demonetisation is more prominent in the tier 3 and beyond cities where small retail shops transact more in cash and penetration of digital payments is yet to reach the levels seen in bigger cities.
From 1.06 million units in third quarter of 2016, the tablet shipments is expected to sharply decline sequentially by 23 per cent in fourth quarter of 2016, the report noted.
"More than half of PC buying from retail and exclusive stores in India is done through cash, hence we are anticipating that demonetisation should further bring down the consumer market by 33 per cent in fourth quarter of this year," added Manish Yadav, Associate Research Manager, Client Devices, IDC India.
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