Phone Retailers Challenge Predatory Online Pricing Ahead Of Festive Season Sales

At the time when ecommerce companies are all geared up for festive season sales starting tomorrow, All India Mobile Retailers Association (AIMRA) has raised concerns on predatory online pricing.

AIMRA has reportedly written to the commerce ministry, the Competition Commission of India and the Department for Promotion of Industry and Internal Trade (DPIIT), asking the government to curb the practice of ecommerce retailers forging exclusive tie-ups with smartphone makers and offering lower prices.

They reportedly alleged that ahead of the critical festive season, the buildup of inventory owing to “predatory online pricing” would sound the death knell for offline sellers and lead to huge job losses.

“The predatory online pricing and exclusivity have 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,” the letter said.

Seeking a level playing field, the association said, “Same product, same time and same price is the need of the hour.” AIMRA president Arvinder Khurana alleged that ecommerce players have been working around the FDI ecommerce rules. “Online channels are provided with the new models first and only once the sales start dwindling after a couple of months, they are released to offline retailers… that are left with a huge inventory and only a few leftover customers who missed the online deals,” he added.

Khurana further said that the issue gains further ground ahead of the festive season since online sellers can potentially take away a large chunk of customers before offline retailers even begin to offer discounts to customers.

It is to be noted that Amazon and Flipkart are starting their annual festive sales and promotions across categories from September 29 and it will go till October 4.

The association further alleged that some unregistered retailers were resorting to the illegal practice of buying online-exclusive models in bulk, at discounted rates, during the online sales period, and reselling them later in the offline market at higher prices. It said that handset makers and etailers were aware of this practice, but again it did not name anyone in particular.

It is noteworthy here that according to global market research firm Forrester, this festive sale season will account for 80% of the $4.8Bn revenue expected in the festive season from September 25 to October 29.

As per Bobble Keyboard’s data on upcoming festive season sale, amongst the online shopping on smartphones, fashion and apparel reign supreme with almost 82% of users talking about the category and a further 79% being brand-specific during their conversations.