The mobile phone industry has struggled to keep providing new mobile phones because of the coronavirus outbreak. In response to the pandemic, the European Union is working towards a coordinated response to help keep the economy afloat. During this time, the wholesale phone industry has seen customers cutting on buying and recycling their phones. However, experts predict that the wholesale mobile phone industry will recover faster than other sectors.
Smartphone Supply Delays
The manufacturing logistics of the mobile phone industry have become much more complicated. Raw materials aren’t as available, and their prices have risen. China has faced the brunt of the coronavirus pandemic.
Due to the impact of coronavirus, the Chinese factory cannot operate normally. The global smartphone supply has faltered. There have been delays in the production and delivery of new mobile phones.
Delivery delays and problems with shipping have become common. E-commerce sites such as Amazon are facing massive demand for home delivery.
What does this mean for mobile phone wholesale in Europe?
Short-Term Economic Impact
The global wholesale industry has been affected negatively by the coronavirus. Ten million employees work in the wholesale sector in Europe alone. Demand has dropped, and there are disruptions in the supply chain. However, the drops in sales and global smartphone shipments haven’t been as bad as it was first expected. Sales of new smartphones dropped by 14% compared to 2019.
The demand for new phones has dropped due to the pandemic. Wholesale refurbished iPhones are an excellent alternative for customers who are wary of wholesaling new iPhones in the current climate.
In the upcoming months, the European mobile phone wholesale industry will likely suffer further losses. Some suppliers are falling short in the stock due to the government shutdowns of the warehouses. Customers will not buy or sell at the rates they have in a short time due to uncertainty. However, the industry is set to rebound.
The mobile phone sales are showing early signs of recovery, as the infection rate in China is declining. Over 40 Apple stores reopening in February. The European industry should consider this a positive sign. Additionally, CCS Insight predicts that demand for mobile phones will increase by 12% in 2021. The retail customers will have a replacement cycle, but it will take longer. Right now, they are looking for cheaper alternatives rather than new ones.
In the short term, Strategy Analytics recommends wholesale mobile phone companies use strategies to help cut losses through the pandemic and into the next cycle. Such as “online flash sales or generous discounts on bundling with hot products”.
Although the wholesale mobile phone industry may suffer from issues caused by the coronavirus, wholesalers should remain confident in their industry. It has proven to be resilient. However, wholesalers should continue keeping an eye on responses of governments throughout the EU-28 to ensure that European companies face a similar profit recovery to China.