FB Pixel no scriptGlobal smartphone players to level the playing field for Indian offline retailers | KrASIA

Global smartphone players to level the playing field for Indian offline retailers

Written by Moulishree Srivastava Published on   3 mins read

Online marketplaces have emerged as a prominent channel for smartphone players.

In a significant move that may put a dent on sales for e-commerce giants like Amazon and Flipkart, all major smartphone brands have decided not to offer discounts or exclusivity to online platforms for their new device launches in their bid to level the playing field for brick-and-mortar retailers.

India’s top two retailers, Xiaomi and Samsung told the industry body All India Mobile Retailers Association (AIMRA) that new models would be launched both online and offline at the same time, and at the same price, local media Economic Times reported. Xiaomi and Samsung held 26% and 20% of the market share in the third quarter of 2019, respectively.

Apart from offering discounts to online buyers, the smartphone makers so far have either opted for exclusive online launches or provided an exclusive window to online retailers before making the devices available offline.

This comes three months after industry body AIMRA wrote to smartphone companies including Xiaomi, Samsung, Oppo, Vivo, and Realme asking to bring parity in how they deal with online and offline retailers. AIMRA had threatened the smartphone manufacturers last week that until a solution is provided retailers across the country would sell at online prices and recover the shortfall from the brands, the report said. AIMRA also gave a boycott ultimatum to smartphone manufacturers.

Following the clarification made by e-commerce giants early October on predatory pricing that it is the brands that offer discounts, AIMRA had rallied to get similar discounts and offers from the brands. Earlier this month, over 5000 mobile retailers protested by shutting shops in the Indian state of Rajasthan.

AIMRA president Arvinder Khurana told ET that Samsung and Xiaomi have informed the brands would maintain parity in launches for their future models. “We want a firm communication from them that they will follow this for all their launches. Otherwise, offline retailers will boycott these brands and anyone else that does not maintain parity,” Khurana said.

Oppo and Vivo, both a part of Chinese giant BBK Electronics which grew in India rapidly on the back of offline distribution, have also recently issued a trade advisory agreeing to offline retailers’ demand for simultaneous launches across all the platforms.

In October, Realme, along with its sister concerns Oppo and Vivo, reportedly said they won’t be launching “web-only” models from January.

Online marketplaces have emerged as a prominent channel for smartphone players. For instance, Samsung India projected to clock USD 1 billion in revenue for online smartphone sales in 2019, doubling over 2018. Brands like Xiaomi, Samsung, Vivo, and Realme grew on the back of online channels, which accounted for 46% of all the smartphone shipments in the third quarter of 2019, a Counterpoint Research report said. In December, industry body Confederation of All India Traders (CAIT) alleged that 50,000 mobile retailers have shut shop in the last 12 months because Flipkart and Amazon snatched their business.

According to industry estimates, smartphones account for over a third of overall sales for e-commerce platforms including Amazon and Walmart-owned Flipkart. With exclusive launches, priority window (launching device online 15-30 days prior to making them available offline), and discounts gone, the online retailers would lose the leverage that they have been enjoying for the last four to five years.


Auto loading next article...