Offline traders warn of Xiaomi, Samsung boycott over online discounting in India

NEW DELHI, Jan 11, 2020, The Economic Times. More than 20,000 offline retailers have told India’s top smartphone makers — Xiaomi and Samsung — that they will boycott the two brands if there’s no stop to deep discounting and aligning with ecommerce players, The Economic Times reported.

In similar but separate letters dated January 10, the All India Mobile Retailers’ Association (AIMRA) also said that if deep discounting continued online, brick-and-mortar retailers could also “simply deduct the difference and sell at online prices.”

ET has seen a copy of the letters, which were addressed to Mohandeep Singh, senior vicepresident, mobile business, Samsung India and Sunil Baby, director, offline sales operations, Xiaomi.

“When brands can control offline MOP (market operating price), it is only imperative and fair that they should control the deep discounting,” the letter said.

Offline mobile traders are fighting against exclusive deals between brands and ecommerce platforms such as Flipkart and Amazon, and demanding simultaneous offline launch of products at the same price.

“We feel the time has come for brands to take our issues seriously, else retailers and 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,” the letter said.

Samsung declined to comment to ET’s queries.

“Offline retail has been an extremely important channel for Xiaomi India in 2019 and with 20% plus market share in offline, we have been the fastest growing smartphone brand in 2019. We will continue to work with our partners in 2020 to ensure that the ecosystem grows and so does the network,” a Xiaomi spokesperson said.

Retailer associations have been relentlessly campaigning against exclusive deals, cashback offers and 15-20 day prior online launches by mobile brands. After grievances were submitted to mobile manufacturers many times, Vivo, Oppo and Realme assured their retail partners that they would launch products and variant at the same time and at the same price across channels.

“Apple does not have any exclusivity among their sales channels, while OnePlus has just entered the offline channel. AIMRA has written to OnePlus as well to end exclusivity completely,” said Arvinder Khurana, president, AIMRA. He added that among the top selling brands, Xiaomi and Samsung have been pain points for long.

“Xiaomi especially does preferential sales by launching its products online an average 21 days beforehand. After robust online sales, it becomes difficult for offline retailers to push Xiaomi products, as their attractiveness has diminished,” Khurana said. He claimed that around 30 smartphone models were enjoying exclusivity and preferential sales during the festive season.