Kolkata|New Delhi: Smartphone brands Xiaomi, Oppo and Vivo assured brick-and mortar retailers that parity will be maintained on pricing, discounts and models with online marketplaces, issuing trade advisories to this effect.
This follows government inquiries into ecommerce festive season discounts sparked by complaints from offline retailers.
Samsungsaid in a message to retailers that it’s evaluating the situation.
The Confederation of All India Traders (CAIT) and the All India Mobile Retailers Association (AIMRA) on Sunday alleged that brands are in league with ecommerce marketplaces to offer deeper discounts.
CAIT said this was in violation of the Competition Act and that it would take up the issue with the Prime Minister’s Office and theCompetition Commissionof India.
Widening protests have increased pressure on companies to curb segregated trade practices that tend to make online marketplaces the first stop for potential buyers.
Even large retail chains have now joined the fray of protests which till recently was led by neighborhood stores.
In its advisory issued on Monday, Vivo Mobiles India chief executive Jerome Chen said the company will ensure all products have same prices and offers across offline and online channels. While there is a production challenge for current online models, Vivo will make some variants of future online products available offline, he said.
India’s largest smartphone maker, Xiaomi, wrote to retailers on Sunday, saying it will ensure online and offline prices and discounts match. It also pledged faster offline launches from next year. EThas reviewed the trade advisories.
Oppo said it will offer the best “consumer offer and dealer profits only for offline this year.” In a WhatsApp message to the trade, South Korean giant Samsung has sought some time since “these kind of decisions are strategic in nature.”
Samsung said it has already matched the prices of its S9, S9+ and Note 9 smartphones, will launch “competitive product in the offline space” and “channel balance” will continue to be its “core guiding principle.” These companies have also announced several offers exclusively for the offline trade and said margins too will be widened.
Last week, Realme assured retailers of parity when it came to launch of similar models, discounts and promotions for online and offline trade.
Xiaomi and Samsung declined to comment to ET. Oppo did not respond to queries.
The organised trade had stayed away from the agitation till now, but players includingBig C, UniverCell, Purvika and Sangeetha Mobiles are now joining hands with smaller mom-and-pop handset retailers who say it’s going to be a “Black Diwali” festival this year with sales at their worst ever, largely affected by online retailers holding multiple sales where smartphone brands have exclusively launched high-selling phones.
“The issues are the same for all offline players, be it large or small… We cannot lose a customer that we’ve cultivated over the past so many years to online just because we don’t have a particular model that online does,” said a senior executive of one of the top handset retailers, requesting not to be named. Another senior executive said larger retailers have individually held meetings with brands.
“Online-exclusive models and exclusive period of sale takes away business opportunities for offline stores. Largeformat retail chains have the same pain areas… they’re also impacted. They are writing and escalating the issues with the brands,” said Arvinder Khurana, president, AIMRA. “We’re pinning hopes on this week alone…lthough we don’t expect demand to increase. Sales are down 30% compared to last year’s Diwali, whereas it should have been up 30% versus last year. It’s going to be a Black Diwali for us retailers.”
He said offline retailers will ask the government to monitor brands since they are working closely with ecommerce marketplaces to roll out exclusive models at a discount.
“Otherwise, offline mobile phone retailing industry will die in India, impacting over 3 lakh stores,” said Khurana.
Several offline phone retailers launched social media campaigns to inform consumers, some even going to the extent of blacking out brands.
The commerce ministry said it will probe Amazon andFlipkartfor alleged unfair trade practices such as predatory pricing. AIMRA said the government should also look into brands during this exercise.
“If the government is drafting some policies, they should also include in their purview the role of smartphone brands in giving out these offers or deals only to online retailers,” Khurana said.
The mobile retailer forum has said smartphone brands should relook their policies to protect offline trade, which still accounts for over 63% of mobile phone sales in the country.
With the absence of direct discounts from brands, offline traders say they are losing out on the opportunity to get more customers while online retailers are using their “dominant position” to take consumer share.