Offline Retailers Demand Ban On Cheap Smartphones Sold Online; Claim 30,000 Shops Closed Down Due To This
A powerful lobby of offline phone retailers have urged the Govt. to stop the practice of predatory pricing by online retailers, especially at the time of festive sales.
As per them, this is leading to an unfair market, and offline shops are shutting down.
Will Amazon and Flipkart allow this to happen?
Offline Retailers: Don’t Allow Cheap Online Prices
The All India Mobile Retailers Association (AIMRA) claims to represent thousands of offline brick and mortar retailers of smartphones, across India.
As per their demand put forth, ecommerce portals are forging exclusive partnerships with smartphone makers, and offering killer deals to the customers, which is leading to their losses.
They have claimed that 30,000 offline shops were shut down, as customers are now buying cheap smartphones from online portals.
This is leading to an unfair market, and if this continues, then they won’t be able to sustain their business.
In a letter to Govt., AIMRA has said, “The predatory online pricing and exclusivity has damaged the ecosystem of the trade beyond repair. More than 30,000 mobile phone retail outlets have been shut down in the past one year.”
How Online Sales Are Damaging Offline Businesses
As per AIMRA president Arvinder Khurana, ecommerce portals conspire with the smartphone makers, and their new launches are exclusively available only at their online portals and apps.
Once the excitement dies down, and sales decline, then only these smartphone reaches the offline retailers, which very less sale for them.
The retailers are left with massive inventory, and no customers.
Considering that 56% of all ecommerce goods sold are smartphones, and 80% of the $4.8 billion revenues expected from festive sales will happen in the next few days, the fears of offline traders and retailers are not fiction.
Although Govt. of India has placed rules on FDI backed online marketplaces: No exclusive partnerships with any manufacturer, and cap of 25% market share for any single vendor, as per the Association, the rules are being worked around.
The Association also blamed some unregistered offline retailers of buying smartphones in bulk during flash sales, and then selling them at higher prices via offline mode.
We are awaiting Govt. stand, since festive sales on both Amazon and Flipkart are starting tomorrow, and there are tons of ultra-cheap smartphone deals this time.