Flipkart, wants its customers to buy a new smartphone every year.
The Bengaluru-based company is launching an exchange programme, starting with smartphones and television sets, that it expects will drive 20% of the sales in these categories by the end of this year.
Flipkart, which says it sells one out of five smartphones in India, expects handset sales to hit 100 million devices this year, but fears sales will begin to taper after that. “Then the only way growth will come is with churn,” said chief business officer Ankit Nagori.
“The average cycle in India for (replacing a phone) is 18-24 months as opposed to Western countries, where it is 12-18 months.” Mobiles devices and fashion products have emerged as the largest categories in India’s online retail market, which is estimated to expand to $36 billion (about Rs 2.45 lakh crore) in 2016-17 from $11 billion in 2014-15, according to Goldman Sachs.
The smartphone category is the largest in terms of contribution to gross merchandise value, or GMV, for Flipkart. It has had a number of exclusive tie-ups with phone makers including Motorola, Xiaomi and most recently, LeEco, to first launch their phones in India, and also has popular phone models from Lenovo and Samsung exclusively on its platform.