Supplies of smartphones, tablets, laptops hit due to lower production & distribution workforce

Two senior industry executives said brands like Apple, Xiaomi, Oppo, Vivo and Realme are facing supply issues with operational plants running at 30-35% capacity and several warehouses are not able to operate normally.

KOLKATA | MUMBAI: Shortage of labour and social distancing norms have been hampering supply of products to the market to meet the pent up demand as makers of smartphones, tablets and laptops are unable to scale up production and distributors work way below capacity.

Two senior industry executives said brands like Apple, Xiaomi, Oppo, Vivo and Realme are facing supply issues with operational plants running at 30-35% capacity and several warehouses are not able to operate normally.

For imported products like Apple’s iPad and Mac computers, and laptops of other brands, the entire supply-chain is impacted –from clearance at customs, warehouses to the distribution system. The Oppo plant in Greater Noida, which manufactures for Oppo, Realme and OnePlus, continues to remain shut after a few workers were found infected with Covid-19 a week back, industry executives said.

In contrast, the fast moving consumer goods (FMCG) industry has managed to scale up capacities at 60-65% with 40-50% workforce in the plants producing products and packs which require lower manpower but still fall short of 40% of the demand.

Retailers said smartphone brands are unable to meet demand for entry-level models which has surged post-Covid, while supplies of tablets and laptops are also erratic.

“Retailers have almost exhausted their stock of sub-Rs 15,000 smartphones where lies the maximum demand and supplies are not coming at all,” said Arvinder Khurana, president of All India Mobile Retailers Association (AIMRA).

On Monday, AIMRA wrote to brands to prioritise stock for handsets priced up to Rs 15,000 to retailers as consumer demand for this price segment is high with average selling price coming down due to cautious sentiments.

The government has allowed up to 50% workforce in factories and strict implementation of social distancing, sanitisation and checking of body temperature of workers before entry. However, the biggest problem for the industry is that they are not able to scale up production due to these norms and non-availability of migrant workers.

Xiaomi India spokesperson said India’s largest smartphone maker was working with local authorities to secure approvals to scale up manpower and production to meet the demand while ensuring social distancing on the factory floor, safety and hygiene measures.

Xiaomi expects to get back to normal in early July-September quarter if spread of Covid-19 is controlled. Realme said the main constraints in May and June will be more on supply than demand. Apple, Vivo and Oppo did not respond to queries.

Packaged food companies like Parle and Britannia have asked the government to relax the 50% norm for them

India's largest food company Parle Products’ category head, Mayank Shah, said with the 50% cap on workforce, it is not able to service almost 40% of the demand.

Angshu Mallick, deputy chief executive of Adani Wilmar, which sells oil and pulses under the Fortune brand, said another big issue has been delivery of products from distributors to retailers.

“Most distributors are short staffed to operate at normal level of efficiency and are also sceptical on payment terms offered to retailers. As a result, they are able to service just 50% of the store network at present," he said.