Samsung Faces Backlash from Mobile Retailers Over E-Commerce Practices
In a significant turn of events, mobile phone retailers in India have raised serious concerns regarding Samsung’s business practices, particularly favoring major e-commerce platforms such as Amazon and Flipkart. Retailers argue that Samsung is providing exclusive access to its products and special discount offers to these online giants, which they believe undermines the traditional retail market.
Impact on Traditional Retailers and the Grey Market
The All India Mobile Retailers Association (AIMRA) has taken a firm stance by sending two letters to Samsung India’s Executive Vice President, urging the company to provide equal opportunities for both online and offline sales channels, particularly during the high-demand Diwali season. AIMRA’s founder chairman, Kailash Lakhyani, emphasized the challenges that traditional retailers face due to aggressive sales tactics employed by e-commerce platforms, stating, “These platforms receive special attention in terms of supply and promotional support. Samsung’s assistance to these platforms is significantly greater.”
Declining Market Share for Samsung
This appeal comes at a critical time for Samsung, as the company grapples with its most challenging sales period in a decade. Once a leading name in the Indian smartphone market, Samsung’s market share has drastically decreased from approximately 50% to less than 15%. The surge in competition from brands like Xiaomi and Vivo has exacerbated this decline, forcing Samsung to reconsider its strategy.
AIMRA’s Concerns and Recommendations
AIMRA has pointed out that Samsung’s shift in focus from traditional retail channels has contributed significantly to its declining sales. In a letter dated September 2, AIMRA’s National Joint Secretary, Navneet Pathak, stated, “The primary reason behind this downturn is the diminishing emphasis on retail channels, which were once instrumental in Samsung’s triumph in the Indian market.”
Conclusion
The growing conflict between Samsung and its retail partners highlights the ongoing challenges posed by the burgeoning e-commerce sector, which is reshaping the retail landscape. As retailers seek to level the playing field, it remains to be seen how Samsung will respond to these concerns and whether it will adjust its strategies to nurture both its online and offline sales channels.
