Offline mobile retailers charge Xiaomi, Samsung of favouring online channel
By MYBRANDBOOK
According to a news source, India’s mobile retailers have accused companies like Xiaomi and Samsung of playing foul. They said that Chinese handset maker, Xiaomi is favouring the online channel and diverting its handset stocks to them. With this the handset makers are avoiding giving margins to offline retailers and maintain profitability.
The retailers have also said that Samsung is not maintaining price parity for certain mid-range M-series smartphones like M21 and M31. The company is selling these devices at cheaper prices in the online channels which is hampering offline retailers’ business.
“Xiaomi did provide new stocks offline recently but that quantity is much lower since they have diverted it to the online channel. We know that brands need to give similar margins to online players. They are thinking about profitability,” an executive with a leading mobile chain told the online news daily.
“We have witnessed a strong demand for our products across offline & online channels and are maintaining an optimum balance across bo h channels with respect to product supply….however, the online channels have seen a higher surge in sales. The biggest reason for the increase in online sales is the comfort of door-step delivery which gives the informed consumers a sense of safety, without having the need to step out,” a Xiaomi India spokesperson said in a statement.
Earlier this month, the handset companies have provided the new stock to offline channel after 20-25 days. Retailers, who didn't wish to be named said that these stocks are insufficient seeing the pent-up demand in the market, especially in the sub Rs 15,000 price segment.
“Only Vivo has been consistent when it comes to maintaining stock supply. Even Oppo brought new stocks via imports for new models. They are supporting us but even their margins have come down," a leading retailer said on the condition of anonymity.
Xiaomi and Oppo have started importing smartphones from China to address the demand in the market. Vivo may also import products from China since its production is running on a low capacity due, people familiar with the matter said.
“While we are functioning at a lower capacity right, we expect it to be improved by Q3 2020,” Xiaomi spokesperson said, adding that it has stepped forward to extend an additional credit period in some cases to distributors to support their liquidity which has been impacted because of the lockdown, and is offering working capital loan for all offline retail partners for business continuity.
The issue of disparity between online and offline retail regarding prices of Samsung smartphones, and reduced margin which is hampering offline retailers’ business has been raised by All India Mobile Retailer Association (AIMRA).
“We have already written to you regarding the preference of stocks in offline trade, especially during times of COVID-19 when retailers have suffered immense losses due to the lockdown. Samsung must rethink and maintain the same price for both channels,” Arvinder Khurana, the National President of AIMRA said in a letter to the company.
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