In the fight between offline and online retailers, Samsung has decided to take the offline route. The company gave exclusive selling rights to offline retailers for 48 of its smartphone models, including the Galaxy Note 4 and Galaxy Alpha. This move from Samsung comes as a surprise when its competitors are selling smartphones online and later releasing them to brick and mortar stores.
The offline retailers are hit by the heavy discounts offered by online retailers, which they cannot afford. In August, the dealers had threatened to boycott the Samsung’s products over this wide gap in pricing concern and now the company’s, this particular decision is believed to be its outcome. Another outcome of this issue is the formation of All India Mobile Retailers Association (AIMRA), that is working for the mutual benefits of brick-and-mortar retailers and maintain price hygiene across trade channels.
Addressing AIMRA, a senior executive with Samsung Electronics said, “We have taken action against many rogue distributors, who were dumping their stocks online and beating down the price of our handsets. We are working hard to bring back price hygiene in the market. Our revenues from online sales have come down from 30% to single digit. We also have plans to stop billing WS Retail, the largest reseller on Flipkart.”
Online retailers claim that determining the price is not in their hands. Amazon India spokesperson told PTI, “We are a marketplace. We do not determine prices. Our sellers decide what to sell on our platform and at what price points.”
Although, Samsung has took a decision in favor of offline retailers, it is not completely abandoning the online channel. The company will still sell some models exclusively on online sites in return for the promise that they are going to maintain the price sanctity of Samsung handsets. Samsung has made exclusive partnership with Flipkart for selling Galaxy S5 Mini.
SOURCE: The Times Of India