Small and mid-sized smartphone retailers across multiple regions are facing an unprecedented cash flow crisis as footfall in offline stores continues to decline. With smartphone upgrade cycles getting longer and consumer spending tightening, many shop owners report that daily sales are no longer enough to cover basic operating expenses.
Salaries Paid From Personal Funds
Several retailers have revealed that they are now paying employee salaries directly from their personal savings. Monthly payroll obligations remain unchanged, but revenues have dropped sharply, forcing owners to choose between shutting shop temporarily or sustaining staff with out-of-pocket funds. For family-run stores, this has blurred the line between business finances and household savings.
Inventory Pile-Up and Reduced Margins
Unsold smartphone inventory has become a growing concern. New model launches arrive frequently, but demand for mid-range and premium devices has slowed. Retailers say distributors offer limited flexibility on returns, while discounts and online-exclusive deals further compress already thin margins in offline sales channels.
Online Competition Intensifies Pressure
E-commerce platforms and brand-owned online stores continue to lure buyers with flash sales, bundled offers, and easy EMI options. Retailers argue they cannot match these aggressive pricing strategies, making it difficult to convert walk-in customers into buyers even during festive or promotional periods.
Rising Operational Costs Add to Stress
Rent, electricity, logistics, and compliance costs have risen steadily over the past year. Unlike sales, these expenses cannot be deferred. Store owners say that even a single slow month can disrupt cash flow enough to delay supplier payments or salaries.
Retailers Seek Support and Policy Relief
Industry associations are urging smartphone brands and distributors to provide better credit terms, inventory buy-back options, and margin protection. Retailers are also calling for policy-level support to help brick-and-mortar businesses survive the prolonged slowdown in consumer electronics demand.
Uncertain Road Ahead for Offline Smartphone Market
Unless demand revives or structural changes are introduced, many small retailers fear permanent closures. While some are diversifying into accessories, repairs, and refurbished devices, others are reconsidering their future in the smartphone retail business altogether.