Consumer electronic brands have asked Amazon India to moderate their discounts, to not more than 15%, during its week long Diwali sale. This comes a few days after Flipkart’s ” Big Billion Day” sale, during which prices were dramatically slashed. Which led to a backlash from the traditional retailers community.Big Billion Day” sale, during which prices were dramatically slashed. Which led to a backlash from the traditional retailers community.
At the forefront of this backlash, are small and medium-sized mobile phone retailers. These retailers have proposed the formation of an independent regulatory authority which will ensure a level playing field between online and traditional brick and mortar stores. Some of these retailers have also asked the government to launch an inquiry into the massively discounted prices offered by competing e-tailers.
Dheeraj Malik, the general secretary of All India Mobile Retailers Association(AMIRA) has called for a body that will regulate all retailers.
“We don’t want that online retail alone should be regulated; the rules should be same for all retailers. We want a level playing field,” Malik told ET after the body held its first national level meet late on Thursday night.
Large Mobile phone manufacturers have urged the E-tail giants not to offer prices lower than the landing prices of brick-and-mortar stores. Typically, Traditional retailers have a 15% margin which during festive periods rises to 20%. E-tailers have been told to limit their offers within those ranges. However, End of life items and items which are exclusively available online will have no such limitations.
Online retail sales account for just 1% of India’s Rs 30 lakh crore retail industry but are projected to grow rapidly. However, this growth is currently coming at the expense of offline retailers with many traditional brick-and-mortar outlets shutting shop in the wake of the competition offered by online retailers.
The Discounts offered by online retailers and their ‘predatory pricing’ strategies are threatening the business of thousand of offline retailers and the indirect ancillary industries they support. Mobile phones are amongst the highest selling products on online portals. Hence, a regulatory body for this retail market which controls both online and offline retail is essential. The AIMRA looks to address this need to ensure the success of the mobile retail Industry.