Players in the smartphone industry in the country are recording reduced sales over the revision of tax regulations governing phone imports.
A spot-check across the industry shows that sales have dropped significantly.
A scenario that has been attributed to the recent changes made by the Kenya Revenue Authority (KRA) in the treatment of imports, particularly concerning smartphones and other excisable goods.
The director of Mobile experience at Samsung East Africa Charles Kimari, says that the change has reduced mobile demand due to high prices.
“We are a marketing subsidiary, we facilitate and market products within the country, and that in place we have seen a significant drop in sales within Kenya because of stock availability in the market,” said Kimari.
Over the past few weeks, Kenya has been experiencing a scarcity of smartphones, causing concern among both official and non-official vendors.
However, with a limited number of smartphones on store shelves, retailers have been forced to raise prices, making it difficult for locals, who are budget-conscious and prefer entry-level smartphones, to afford these devices.
“I think there is an ongoing discussion behind the Scenes to clear this up and maybe we can get back to the proper footing and stock availability in the market,” added Kimari
The smartphone industry in Kenya has been grappling with multiple hurdles, including taxation measures and supply shortages, which have adversely affected prices and availability.
However, Kimari says that the outlook is promising as Samsung is looking to increase sales for its premium foldable devices by 30 percent.
“We were targeting a bigger number but as you know there are other constraints in terms of other factors economically so we downgraded to 30 percent. Pre order alone we are looking to sell 3000 units in the next 3 weeks subsequently drop to 500-700 units per week for the remainder of the year,” added the Kimari
The change in imports rules has seen Kenya's smartphone market hit by reduced demand amid high prices as importers of the gadgets pass on the jump in import costs to customers.
This will fuel the buy now pay later models in the country according to the device maker.
“Before we were selling a lot of them in cash but now we are looking for additional bracket people who don’t have cash but can pay for it slowly and collect their device,” he noted
Another trend that he says will take over the market this year is trade in old gadgets.
He says the trend has been on an upward trajectory in the past few years with 2021 recording 150 units, 2022 posted 400 units and 2023 expect to do 800.
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