Realme: Wont offer higher margins to offline retailers at cost of customers

Smartphone maker Realme Monday said it would not offer higher margins, which affect prices for end-customers, to brick-and-mortar retailers, even if the decision may result in slower offline sales for the brand.

The company, which spun off as an independent entity from Chinese smartphone major OPPO, said it continues to scout for offline retail partners that are "customer-centric".

"We look for partners who are more user-centric. We cannot offer higher margins at the cost of users. It's a brand ethos, we can't offer a product on differential margins and that is why we are selecting partners who think like us.

Because of this, our offline expansion may be slow, but it will be gradual and strong," Realme India Chief Executive Officer Madhav Sheth told PTI.

He added that in less than a year of operations, the company already has a presence in more than 35 cities at over 3,000 retail outlets. Realme also sells its devices online through Flipkart, Amazon, as well as its own website.

Reports had suggested that offline retailers, including large chains like Reliance Retail, are refusing to sell Realme smartphones on account of low margins offered by the handset maker.

Sheth said the company is not rushing to shore up sales through offline channel, which accounts for about 20 per cent of the sales.

"LFRs (large format retail stores) contribute to about 10 per cent in the country's sales and if we go with them, we will definitely see a 10 per cent increase. But we cannot compromise on the cost for a user by giving them (offline retailers) margins at the cost of the customer," Sheth said.

He added that the company offers the same margins to offline retailers as it does to online.

Realme, which has sold over 5 million units in India so far, on Monday launched its latest offering - Realme 3 for Rs 8,999 onwards.

The device features 6.2-inch display, MediaTek Helio P70 chipset, 13MP+2MP dual rear and 13MP front camera, and 4,230 mAh battery. It also includes a rider mode, which when enabled switches off notifications and allows calls only from selected contacts.

The company will unveil a Realme 3 'Pro' version next month.

According to IDC, Realme broke into the top 5 smartphone companies tally in the December 2018 quarter, securing the fourth spot with 7.5 per cent share.

Xiaomi led the market with 28.9 per cent share, followed by Samsung (18.7 per cent) and Vivo (9.7 per cent) in the said quarter that saw a total shipment of 36.3 million units.