Samsung Amending Online Pricing Policy to Appease Trade Channels

By Zia Askari

In its bid to find the right balance between online and telecom trade channel partners, Samsung Electronics India has finally decided to amend its online pricing, paving the way for normalizing price points between what is available at online e-commerce stores and its authorized resellers in India.

While there is no confirmation yet, from Samsung officials, the company’s channel partners present a mixed set of reactions on this issue.

According to Sunil Arora from Arora Sons, one of Samsung’s channel partners in New Delhi, “We were facing this huge challenge of lower price points being offered at online e-Commerce websites and this has affected our business pretty badly, we did show our concern and are happy to know that Samsung is changing its online pricing policy to support us,” he explained.

Vinay Dixit from Kolkata based Nikkys said that Samsung needs to define clear policies for its telecom trade channel partners so that there is no confusion in the market.

“Today, there are so many elements that are going against a telecom channel partner. Especially, when it comes to the selling Rs 30,000 and above smartphone range, there is very limited certainty. There are times when we stock a product and suddenly find out that the vendor has drastically reduced the price points. Also in the case of Samsung, there is a huge difference in margins for MBOs (Multi Brand retail Outlets operate at about 5.5 per cent) and there dedicated stores (Samsung Stores operate at around 9.5 per cent margin). Strangely there is a big difference of sales targets as well. Samsung really needs to change this fast otherwise there, the situation will only get worse,” he added.

On the other hand, speaking about the rise of online channel business, Rajnish Mamania from Mumbai based Record Shoppee says that there is no doubt that today, online business is on the rise, but multi-national brands like Samsung must create best practices in this trade which can even be replicated elsewhere. Ideally vendors should try and make the most of both the channel partners by better managing the inventories and providing exclusive support to different set of online and traditional partners. “We are thankful to Delhi channel partners, because of whom we are also going to benefit as Samsung is now changing its online policy and support us,” he added.

At a time when there is a surge is smartphone sales within India, fast emergence of online trading platforms such as Flipkart.com or Snapdeal.com is creating a big dent in the way business is being done and traditional channel business is becoming under threat. However, moving forward, more and more vendors would need to find the right balance in their go to business strategies in order to create a winning ecosystem.