Fight Against Predatory Pricing: IT Traders’ Purchase Boycott Starts
New Delhi, Dec 15: Starting today several IT dealers across the nation will be refraining from purchasing IT products from the national distributors and brand owners for an indefinite period. Soon the movement will be joined by non-IT traders as well as big retail players.
In a directive from FAIITA (Federation of All India IT Association) all the supporting members are advised to voluntarily refrain from purchasing any material from December 15 onwards. All states are advised to join the national movement to fight for a level playing field and to stop predatory pricing practices indulged by OLS and others. There are some States like Uttar Pradesh, Gujarat and Rajasthan, who have already started the boycott.
While comparing this to the Anna Hazare’s Anti Corruption movement, Saket Kapoor, one of the north-based secretaries of FAIITA said, “This is a movement against predatory pricing and gradually more IT and non-IT offline dealers will be joining in and impacting the sale of national distributors and brand owners.”
FAIITA has issued an advisory listing the companies, who have failed to come up with policies to tackle the predatory pricing of the online channels. The list includes Apple, Dell, Lenovo, HP, Acer, Asus, Toshiba, Canon, D-Link, Ricoh, Epson, Brother, Samsung, Adata, IOMega, Seagate, WD, Hitachi, Sandisk, Transcend, Kingston, Benq, LG, Viewsonic, AOC, Logitech, Iball, Intex, F&D, TPLINK, Netgear, Quickheal, Sennheiser, Cooler Master, Belkin, Sony and Digilink
“All the shops will be open and partners will sell the current inventory to the customers, without raising the new billing. Moreover, we have asked our channel partners to sell items by matching internet prices and debit note will be raised on T1 Channel Partners for the price differential. T1 partners can talk to OEMs on unsold stocks and ask them to take it back due to these concerns,” said Kapoor.
Before deciding on the indefinite national boycott, FAIITA had contacted all the major PC brands owners and national distributors seeking their support to control the predatory pricing issue. Although brand owners like Dell, HP, Lenovo had issued advisory for the online channel, none of the advisory took a cognizance of resolving the discounting issue, which was what the dealers were looking at.
Supporting the purchase restraint, Gujarat based FITAG secretary, Sejal Patel said, “FITAG is supporting FAIITA for this momentum against Online Business. It’s a fight for our survival, so let’s join hands to show our unity among ourselves and the entire country for our bright future.”
Besides IT dealers protest, another national traders association Confederation of All India Traders (CAIT) is also planning to take the protest to the streets on Dec. 18. The predatory pricing is not only hurting the business sale of small dealers, but also is impacting the sale of large format retailers big players.
Recently, Retailers Association of India (RAI), an apex body of major retailers whose members include RIL, Aditya Birla Group and Bharti has been formed. This is an attempt by the big boys of India’s traditional retail market to come together and fight the onslaught of their online counterparts.
In letters to the ministries of finance and commerce, those with significant interests in the retail business such as Reliance Industries Ltd (RIL), Aditya Birla Group, ITC, Bharti and Future Group have complained against predatory pricing on e-commerce platforms. They have also sought clarity in norms for the e-commerce sector, as well as for the overall retail sector.
Though protests against deep discounts by online retailers such as Flipkart, Amazon and Snapdeal have continued since events such as Flipkart’s Big Billion Day sale and Amazon’s Diwali Dhamaka Week, this is the first time major players from the segment have come together in the online-versus-offline war.
This movement is certainly going to give some sleepless nights to brand owners as well as the national distributors. Commenting on the purchase restrain, Sanjiv Krishen, Chairman, Iris Computers, one of the Delhi bound national distributors said, “We understand the online pricing is a big challenge for the IT dealers. Having said that online market is still close to 10% in India and large chunk of the business is with the traders only. It is time that traders evolved with the time and look for services and solution business to counter online business, as online is the new way of business model.”