Mobile handset brands reduce offline workforce; seek rent waiver for storesNEW DELHI: Handset brands in India have started reducing retail store workforce or in-store promoters due to zero sales in the offline channel, even as Xiaomi, long-format, and multi-brand retailers have reached out to landowners of their stores asking for a rent waiver for at least three months.

For some brands, these promoters are hired through third-party vendors, while some brands take them on board through a mix of on and off rolls.

Sources familiar with the matter said brands like HMD Global and Motorola are now reducing their in-store promoters, and are also cutting incentives for retails seeing no sales in the market. They said that retailers will not do billing for at least a quarter and will not take sell-ins since they are already sitting on inventory.

AIMRA national president Arvinder Khurana told ET that there’s no buying taking place, and in future even upgrades will not happen. “Since costs are high for sales, brands will release promoters from stores.”

HMD Global, the maker of Nokia handsets, didn’t comment on the layoffs but in a statement said, “There’s no doubt that the ongoing impact of COVID-19 is taking its toll on markets and like many businesses, this pandemic has impacted ours.”

The spokesperson added that salaries for March 2020 to all promoters were paid by their respective employers. “As with the rest of the industry, we continue to observe and evaluate the situation given the COVID-19 pandemic.”

Lenovo-Motorola, however, denied laying off any promoters and said that it is retaining all its in-shop promoters across India.

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“All salaries for our ISD’s, including incentives have been paid out in full as of March 2020. We are also committed to honouring their salaries for April’20 in full, irrespective of the business scenario and even without a day’s work if required,” Lenovo-Motorola said in a statement.

Upasana Joshi, associate research manager at IDC said that there will be a reduction in channel spends in terms of incentives, over the top margins, count of promoters, etc. “Retailers are demanding lower monthly targets from brands, waiver for rentals from owners of the shop if the shop is on rent.”

Xiaomi has reached out to its landowners for waiving off on the rental for its all exclusive format stores for the period of closure, a company a spokesperson told ET.

AIMRA’s Khurana said that all big LFRs and MBOs have also sought similar waivers for a period of three months from their respective land owners.

Khurana said that retailers need to pay salaries to employees and if lockdown continues beyond April month then all retailers will suffer. “Small retailers will go bankrupt in case of an extended lockdown. Lockdown is a loss bearing period. Govt hasn’t provided any relief. There is electricity charges, Wi-Fi charges, salary of guards, labour force that retailers are concerned about.”

“All retailers are under pressure from distributors. Aging stocks will also result in losses to retailers. There are plenty of problems,” he added.



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