Mobile phone retailers have reached out to leading cellphone manufacturers on Friday that brands need to control online deep discounting as they work closely with the online channel and since they already control the market operating price for offline stores.
Cellphone retailers under the umbrella of their apex national body, All India Mobile Retailers Association (AIMRA) has informed brands like Xiaomi, Samsung and OnePlus that unless online discounting is controlled, retailers will deduct the difference and sell at online prices and may even consider boycotting the brand altogether.
“We feel the time has come for brands to take our issues seriously, else retailers/associations will not fear to boycott the brands. We are not in favour of force but if the current scenario demands it, we shall not withdraw,” said the letter written by AIMRA president Arvinder Khurana.
Last month too, AIMRA had shot a letter to the brands warning them that they would sell at online prices if online discounting is not controlled and recover the balance from distributors and may even boycott the brands.
Oppo and Vivo subsequently shot a trade advisory assuring retailers of launching similar products at the same time in both online and offline stores and at same price. Realme too has assured the same. AIMRA executives said Xiaomi, Samsung and OnePlus are yet to communicate any decision in this regard.
Earlier this week, AIMRA held a national convention in New Delhi where more than 20,000 retailers and distributors from across India participated to push the brands to meet its demand. Mobile phone retailers had also downed shutters for a day across the country as protest.
“This only goes to show the abysmal state of business across the country…November and December 2019 registered the worst business seen in 15 years,” the letter said.
Khurana told ET that thousands of cellphone stores have shut shop in the last one year. “The existing e-commerce policy prohibits exclusivity, but the brands have worked around it by continuing to roll out exclusive models. We are pressing the government to plug these loopholes, stop online predatory pricing and set up a regulatory body to ensure the policy is complied,” he said.
As per US-based market tracker International Data Corporation, online accounts for more than 45% of total smartphone sales in India. It said smartphone sales in India during July to September period were driven by e-commerce with offline sales declining by 2.6% year-on-year.
AIMRA, along with traders’ body Confederation of All India Traders, has been protesting against e-commerce discounts since Diwali. These two organisations have made multiple representations to the government, whereby commerce minister Piyush Goyal had even warned of strict action against e-commerce marketplaces if the e-commerce policy was violated.―India Finance News