Mobile Retailers Demand Action Against Chinese Brands for Unfair Practices
In recent developments, mobile retailers in India have voiced strong concerns against the anti-competitive practices of popular Chinese smartphone brands, particularly iQoo, Poco, and OnePlus. The All India Mobile Retailers Association (AMIRA) has formally requested intervention from the central government, highlighting the detrimental impact these practices have on local businesses and the national exchequer. The association is urging the cancellation of licenses for companies that engage in what they describe as unfair business practices.
Concerns Raised by AIMRA
Kailash Lakhayani, the Founder and Chairman of AIMRA, expressed his apprehensions regarding these companies’ practices during a conversation with Moneycontrol. He stated, “Despite the findings of the Competition Commission of India (CCI) report and our consistent follow-ups, these companies are not adhering to regulations. They continue to engage in exclusive agreements with e-commerce giants like Amazon and avoid distribution through traditional retail networks.” This behavior, according to Lakhayani, not only undermines local retailers but also disrupts the overall market dynamics.
The Financial Implications
AIMRA highlighted another critical issue: the unauthorized movement of goods from online to retail marketplaces. This practice significantly hampers the rotation of funds and deprives the government of additional Goods and Services Tax (GST) revenues. Lakhayani emphasized the necessity of protecting local businesses and sustaining fair trading practices within the Indian market.
Impact on Local Retailers
According to the association, the trend of exclusive distribution agreements severely disadvantages local retailers, raising significant compliance concerns. Lakhayani pointed out that many Chinese brands exploit online platforms to facilitate gray market activities, directly undermining fair competition standards in India.
Formal Request to Government Officials
On September 27, the association communicated these pressing issues in a letter addressed to MP Praveen Khandelwal, seeking assistance in bringing this matter to the attention of the Commerce and Finance Ministries. Lakhayani noted, “The recent CCI report has highlighted alarming anti-competitive behaviors from both e-commerce platforms and Original Equipment Manufacturers (OEMs). We are calling for the cancellation of licenses for companies that fail to support local businesses and fair trading practices.”
Focus on E-commerce Platforms
In their correspondence, AIMRA specifically mentioned the operations of Vivo’s sub-brand iQoo. The retailers’ body observed that iQoo predominantly sells its products through online platforms such as Amazon, Flipkart, and its own website, neglecting traditional retail outlets. They have consistently urged both Vivo and iQoo to ensure better stock availability for local retailers to foster a balanced retail ecosystem.
Conclusion
The call to action from AIMRA sheds light on an ongoing struggle within the Indian mobile retail sector as local retailers advocate for fair practices against the backdrop of increasing competition from Chinese brands. The outcomes of their appeals to the government will be crucial in shaping the future of mobile retail in India, determining whether local businesses can thrive under equitable conditions or if they will continue to be overshadowed by dominant forces in the market.
