Will PC brand owners protect its offline channel from online predatory pricing?

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Perturbed with the upcoming e-commerce companies festival season sales, Federation of All India Information Technology Associations(FAIITA) have put an endeavor to stop the deep discounting practice of these online marketplaces. The association which represents 30,000 IT partners across India have met five PC brand owners in the month of August in New Delhi and showed its ‘zero tolerance’ against any predatory pricing on laptops during this week-long online festival sales, starting from September 29- October 4th, 2019. The association has received an email confirmation where the brand owners have shown solidarity and support to the FAIITA member’s decisions.

Speaking exclusive to CRN, Alok Gupta, President, PCAIT and Convener, FAIITA said, “We have taken a strong stand against any price disruption during the festival season on any of the online portals. We have taken a zero-tolerance approach to any price disruption whatsoever on any online platform including the brand’s own platform. Secondly, FAIITA will not allow any models’, SKUs’, derivates’, etc. parity across at GTMs’, be it offline stores, Online, LFR, etc. Thirdly, the association has demanded brand owners to share with FAIITA secretary and or their authorised channel within seven days quantity and the SKUs’, Models, derivates sold to online purchase arms and the likely price during the festive season.”

The association conducted a high-level meeting with brand owners including a representative from HP, Lenovo, Dell, Acer, and Asus, along with its 35 state federations members to discuss and reduce the impact of festival sales due to online pricing on the IT channel. “This year, we have given 45 days advanced notice to brand owners so they can plan their festival sales period keeping in mind its traditional channel does not get the burnt on business due to the predatory pricing,” he says.

FAIITA believes if all the brand owners support the offline channel’s demands it members can register a 50% increase in sales. The association is making efforts to give a breather to its members this festival time and make good sales during festival times. “If all goes fine our channel can make up to previous low sales cycle and restore the confidence in brands,” Gupta adds.

After the meeting, FAIITA has received a letter where all the brand owners including MAIT has confirmed and agreed to its demands. However, FAIITA will be vigilant on online pricing and also caution its members to refrain from any predatory pricing practice. In light of any deep discounting given by brand owners, FAIITA will issue appropriate advisory protecting the business and profitability of its pan India members.

The traders’ boy argued that the loss accrued to sellers by selling goods at a much cheaper rate is being subsidized by the marketplace or the manufacturers or someone behind the curtain or it has more influx of products that originate from grey market and hence there is a difference of prices in offline and online trade. We want brand owners to take responsibility for controlling the pricing and protect the survival of its traditional channel which is still 80% of their business.

Apart from FAIITA, another All India trade association Confederation of All India Traders (CAIT) has locked horns with the ecommerce companies that have sought a blanket ban from the government on the upcoming online festive sales.

FAIITA’s key activities

  • GST on multifunction printers and monitors reduced from 20-18%
  • Controlling of online pricing
  • Settlement of payment defaults partners to partners and customers
  • Settlement of back end rebates
  • Business among inter-states partners increased
  • Promoting Make in India brands
  • Increase in SIs business opportunity
  • Reducing plastic wastage in Nehru place

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