Phone companies press the crackdown button on deep online discounts
Xiaomi and Realme are cracking down on scalper retailers looking to make a quick buck by selling devices cheaper on online platforms as the companies bet big on the offline channel to boost growth in the world's second-largest smartphone market.
After complaints from retailer associations, brands including Xiaomi and Realme are repurchasing stocks selling at lower prices to trace back the retailer and distributor and penalise them, according to correspondence between the two parties ET has seen.
For now, brands are letting retailers go with a warning, making them sign an undertaking that prohibits them from selling their products outside the authorised channels to avoid higher liquidation damage and loss of business. ET has seen multiple instances of such undertakings signed by retailers in Jammu, West Bengal, Haryana and Tamil Nadu, among others.
The action comes after several complaints from state units of the All India Mobile Retailers Association (AIMRA) that represents 150,000 mobile phone retailers in the country. The association has seen over a dozen products from brands such as Xiaomi, Realme and Samsung being sold at prices on online channels that are around ₹1,000-2,000 lower than their minimum operating prices (MOP).
«This is a real alarming situation to hear that a brand has allowed the ecommerce platforms to register retailers online, majorly wholesalers, to sell their products just to gain share but actually losing the ground and faith of the mainline retailers who have been putting hard efforts
