Recession cuts mobile phone sales by 80%

• Vendors lament harsh business climate
• Users opt for repaired, low-end phones

The current economic downturn is taking its toll on the country’s hardware market, as the patronage of mobile phones and other devices has gone down by as much as 80 per cent.The Guardian’s investigation revealed that the last time consumers besieged some of the vendors’ outlets, especially to purchase new mobile devices, was in March this year. Rather than buy new ones, most Nigerians either maintain their damaged phones, go for refurbished ones or buy low-end devices available in the market.

Also, Personal Computer (PC) penetration in Nigeria remains very low and stagnates at four per cent.Country Manager of a Nigeria-based software company, Olubunmi Ekundare, says PC still holds more promising feature and power than the mobile devices.

Some of the leading mobile phone vendors who spoke to The Guardian at the weekend, confirmed that there has been a lull in the mobile device market, which they blamed on lack of liquidity. It was also learnt that online shopping for smartphones on some eCommerce sites has drastically gone down.

A senior manager at a leading mobile phone sales outlet in Nigeria said the economic situation in the country had badly affected the purchasing power of the citizens who are no longer buying phones.

Device vendors generally agreed that the mobile phone market is seriously challenged, as sales continue to plummet. “Only God knows what will happen by the end of the year. People hardly buy phones or electronics any more. The traffic has gone down by between 70 per cent and 80 per cent. Government must fix this economy, and quickly,” a senior manager of a micro station said.

In an interview with The Guardian, founder of Yudala, a leading eCommerce site in the country, Prince Nnamdi Ekeh, confirmed the lull in the market, but hinted that the firm was strategising to earn more market share.Ekeh, who said mobile phone sales had decreased tremendously, added that Yudala would rather strategise to pull customers from competitors than waiting for new ones to come to the market.

According to him, so many strategies that would help Yudala realise this objective are already in the pipeline, and would soon be unveiled.Ekeh stressed the need for the government to resolve the foreign exchange (forex) problem. According to him, the forex situation is impacting on the information and communications technology sector, which needs it to place an order for equipment.

Speaking to The Guardian, Chief Executive Officer of Jumia, Juliet Anammah, said that with the downturn in the economy, “people now prioritise their wants because there is no disposable income like before.”

Anammah, who noted that people have not really stopped shopping, said: “There is less focus on mobile devices and electronics, but more attention on basic needs and wants. Even with the prioritisation, what we have noticed is that people now go for lower brands that can serve the same purpose as the leading ones. The reasons are obvious, no disposable income.”

A senior manager with Lenovo, who spoke in confidence, said people were still buying mobile devices, but not the premium and high-end brands. He explained that there had been serious growth in the purchase of devices in the range of N25,000 to N30,000, “but the high-end ones, worth more than N100,000, now suffer low patronages.”

Relying on statistics from GFK, a leading research consultant, the Lenovo official disclosed that about 550,000 smartphones are sold monthly in Nigeria, while about 25 per cent of this is sold in West Africa.

A consumer, Funbi Akintola, told The Guardian at Slot Office in Ikeja that people would not buy phones when they are hungry, stressing that with the current economic situation, the customers prioritise their wants.

“Traffic has really gone down here. By this time last year, you could hardly find space inside this outlet. The situation is not peculiar to Slot alone, other shops too are affected. People don’t have money to throw about anyhow anymore,” she stated.