The contribution of mobile phones as a category to gross sales or GMV for Indian e-tailers fell in the first quarter of 2019 owing to saturation of demand, reduced discounting, and policy changes, according to RedSeer Consulting.

Sources also indicated that this quarter had very few large exclusive mobile launches which also led to the decline in sales.

Between January and March, the share of mobile phones fell to 38% from 45% a year ago in the same period. Redseer predicts the share of mobiles for e-commerce will remain at around 35% for the entire year. The two largest internet companies that sell mobiles online are Flipkart and Amazon.

As a result, the growth of GMV in absolute numbers also dramatically fell with only an 8.5% rise to $6.4 billion in the first three months of the year. Last year, GMV grew 28% to $5.9 billion.

“This change bodes well for the whole ecosystem- for horizontals as it indicates a clearer path to profitability, with a GMV composed of higher margin non-mobile categories. For verticals, the growing comfort with non-electronics helps them increase their total consumer base and attract buyers by offering a better experience,” the report said.

Categories like home, business, and general merchandise continue to grow, owing to wider selection, and superior shopping experience, according to the firm.

Flipkart chief executive Kalyan Krishnamurthy had said in an earlier interview to ET that home, general merchandise, women apparel, mom and baby categories are growing faster than highly penetrated categories like mobile phones and consumer electronics.

“Our belief is that in certain categories, including home, general merchandise, women apparel, mom and baby categories, and appliances, the market has been growing at 60-70% last year,” Krishnamurthy said.