FX drives market to cheaper phones

Demand for cheaper phones in Nigeria has increased in the last three months. This is as a result of the restrictive monetary policies of the Federal government, which has pushed up the prices of all the phones.

BusinessDay investigations reveal that consumers’ demand for Techno products is now very high, owing to the price friendliness, durability and longevity of the battery.

A survey at Callus Miller Communications Limited, a popular phones and accessories shop in Port Harcourt, shows more consumers tilting towards Techno products, which are known to be relatively cheaper due to consumers’ dwindling purchasing power.

“We usually had more buyers for our Samsung phones because the product is durable, but when the dollar rate increased, the patronage for Samsung phones reduced because we had to increase the price. Most of our customers started buying Techno phones that have similar features with Samsung.

“Now that dollar has come down, we have to sell out the phones we bought when dollar was high. So, the high price of our Samsung phones is still scaring some buyers away,” the manager of the store, who does not want to be mentioned, told BusinessDay.

“Cost pressures will persist with forex scarcity and naira weakness. Consumer resistance to price hikes is leading to substituting for alternatives and outright boycotts,” Bismarck Rewane, CEO, Financial Derivatives Company (FDC), said.

Nigerian inflation increased in May to the highest rate since February 2010, as food, electricity and other energy costs drove up prices in Africa’s largest economy. The inflation rate rose to 15.6 percent from 13.7 percent the month before, the National Bureau of Statistics (NBS) said on June 14.

“Consumers have become more conscious, concerned and conservative because of the state of the economy. Consumers will proactively search for savings, they will remain brand loyal but only if the price is right,” Temitope Oshikoya, CEO/chief economic strategist, Nextnomics, said.

BusinessDay survey in Port Harcourt, Lagos and Abuja shows the prices of Samsung phones increasing between 15 percent and 21 percent in the last three months.

The price of Samsung Galaxy S6 rose to sell for N195,800 from N174,000; Samsung Galaxy J2 now sells for N888,888 against N820,000, and Samsung Galaxy A5 sold for N95,000.

Also, Samsung Galaxy S7 Edge goes for N230,000 against N198,000, Samsung Galaxy S6 Edge is now N205,000 from N183,000, and Samsung Galaxy J5 now sells for N52,000 against N46,000 in the last three months.

Similarly, the prices of Techno L8 plus and Techno C8 were N29,000 and N34,500, respectively, but now, N32,000 and N37,000, respectively, which is over 12 percent increase for both phones.

Another survey at one of Slot Nigeria’s showrooms in Lagos shows consumers’ preference for phones divided between Samsung and Techno phones with more people opting for Techno products, which are relatively cheaper.

“Samsung has built a brand over the years because of its durability, picture quality and sound functionality. So, some people are still crazy about the brand but the demand has dropped for some months now because of the price increase.

“Techno phones are trending now because the product is good and the price is not too high. Few customers demand for Gionee phones because of the longer battery life and it can serve as a power bank to charge more than two phones,” Niyi Adekoya, the branch manager, said.

The demand swing in favour of Techno products did not change at TNT Communication in Abuja, as BusinessDay gathers from the attendant who complained that the high exchange was biting hard on them.

“We have more people requesting for Techno phones now more than before. I believe it’s because the phones are cheap and still have attractive features, which are not common with most cheap phones. Sales have been annoyingly low and most people now prefer fairly used phones,” Esther Nwosu, the store attendant, said.