FAIITA meets the traders associations of various non-IT products in the Constitution Club, New Delhi and chalks out a plan to raise voice against the price discrepancies between online and offline sales across product categories in India.
A major set back to the vendors, following PACT, FAIITA has issued the IT brands an ultimatum to all the major IT brands of returning the already lying stock at the outlets to the respective distributors.
VARINDIA managed to get hold of a copy of the letter sent. The letter from Federation of All India IT Association (FAIITA) says, “We regret to inform you that the assurances provided by your brand regarding support for the channel, including commitments to consistent pricing and inventory management, have failed to materialize at the ground level. This lack of support has negatively impacted our dealers, leading to the necessity of sending this notice. Given the current situation, we kindly request that you revise your sales targets in accordance with the actual purchase volumes by our dealers. It is critical to realign with market realities to protect our mutual interests. Furthermore, the existing policy of supporting prices through sell-through and sell-out schemes is no longer acceptable, and we demand its immediate withdrawal in favor of a more transparent pricing and support model. Please note that inaction on this notice will lead to serious consequences, including a halt in payments, a purchase ban (bandh), and potential ground-level agitation against the illegal online practices by brands and e-commerce portals that have harmed the traditional channel.”
Just to share the background, a couple of months back, Punjab Association of Computer Traders (PACT) approached the vendors, with an official letter sharing their concerns. It was to bring to light the price discrepancy in offline and online sales. Recently PACT President Vikas Narang welcomed the members and Vendors for an emergency meeting. With no solution assured, the association decided to ban or stop buying (billing) laptops and desktops.
According to a dealer from Ludhiana, there is a huge price difference between the price offered online and offline. “Why would anyone buy the same thing for 50,000 when the same thing is being sold for 40,000 online,” he shared.
Due to price difference, there is a massive build-up of inventory with dealers as online eats its share riding on cash back offered by various banks on credit cards. The current online sales and online offers have jeopardized the existence of B&M sector (off-line) stores and MBO’s.
This spark is catching fire. With dealers across the country facing the same trouble, other state level associations are also raising concerns and giving formal written complaints seeking immediate solutions. During the recent IT Expo and Retail Conclave, FAIITA had tabled the concerns face to face to which brands assured of corrective measures during the ongoing festive period. But to everybody’s disappointment this year the price difference between online and offline is to the range of 20 – 30 percent.
Devesh Rastogi, President, FAIITA is in Delhi and spoke to VARINDIA and shared, “It is very saddening to know how brands are ignoring the injustice. Though ‘no billing’ is not a wise decision, but our interests have been cornered so badly that we are left with no option.”
FAIITA is representing the dealers and all the state level IT dealers associations. Still if any state level association wants to take dire steps. They are more than welcome and Mr. Rastogi has assured the support.
FAIITA has politely but authoritatively asked the vendors to stop the ongoing unhealthy sales practice with immediate effect or else on 4th November 2024, the stock on hold will be returned, to the distributors. If they don’t take it back then the partners will stop payment starting from 5th November.
Highlighting the gravity of the situation Mr. Rastogi shared that this price disparity has not left a single product category. In Delhi more than 40 major state and national level dealer associations have met and chalked out a plan to stand against the vendors’ mal-practices. The problem will not be addressed individually but the government will also be involved. 1st week of Feb 2025 the dealers association will have a peaceful dharna, followed by a big rally at Ram Leela Maidan, Delhi.
With so much planning, it is believed that vendors will have to put an end to such price disparity and mal-practices in the country.
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