Even as domestic seller associations in India have been complaining for a long time about the predatory pricing policies pursued by the ecommerce companies particularly Flipkart and Amazon. This time, mobile phone sellers have expressed their strong condemnation of the way these online retailers have offered discounts on mobile phones of up to 62% during the Festive Sale, taking away business from offline retailers.
The Indian Cellular and Electronics Association (ICEA) is the body that has raised its voice now and the body wants authorities including the Competition Commission, to share with them how they all view this situation in the sector. According to them, the proportion of mobile phones sold online has reached 45-50%, whereas the comparable figure for a country like the US is just 2%.
ICEA claims this is only due to the unfair pricing of mobile phones allowed to be done by the ecommerce firms here. According to them, a total of 45,000 offline retail stores have closed down in the previous one year alone.
The industry body admits that there is a difference of opinion among their own members; however, it is being seen as a matter of ethics and morality more than anything else. The manufacturers of mobile phones are in a catch-22 situation. They would want the online business to grow since it gives them volumes, but they cannot let the offline retailers go since they are also contributing to the overall business growth. There have been instances where the retail giants have refused to lift stocks from the manufacturers till the online issue is resolved.
On earlier occasions, both Amazon and Flipkart had claimed that they are not violating any laws and are only benefitting the end consumers at large.
Meanwhile, ICEA has joined hands with McKinsey in preparing a detailed report on the present shortcomings in the industry in the country and to suggest the way forward to make India a global powerhouse in the mobile phones business.