In a surprising move, Samsung has decided to take the offline route and give exclusive selling rights to offline retailers for 48 of its smartphone models, including the Galaxy Note 4 and Galaxy Alpha, The Times Of India reports. Also Read - Galaxy Note 4 units recalled due to overheating batteries, but it isn't Samsung's fault
With all the other competitors now launching their smartphones on e-commerce sites and later releasing them to brick and mortar stores, this move from Samsung comes as a surprise. However, this move is related to the pressure on Samsung by offline retailers about online retailers selling smartphones below cost. Also Read - Flipkart Brand Day: From Galaxy S5 to Galaxy Note 4, get up to Rs 7,000 off on Samsung smartphones
In August, dealers across the country had threatened to boycott the company’s products over pricing concerns. The dealers said that they would stop stocking Samsung phones unless the South Korean tech giant takes steps to narrow the wide gap in pricing between its phones sold at various offline outlets and on e-commerce sites. Also Read - Samsung Galaxy Note 5 vs Samsung Galaxy Note 4: What's new
Online retailers claim that determining the price is not in their hands. Amazon India spokesperson told PTI, “We are a marketplace. We do not determine prices. Our sellers decide what to sell on our platform and at what price points.”
Addressing this issue, a senior executive with Samsung Electronics said made a statement, “We have taken action against many rogue distributors, who were dumping their stocks online and beating down the price of our handsets. We are working hard to bring back price hygiene in the market. Our revenues from online sales have come down from 30 percent to single digit. We also have plans to stop billing WS Retail, the largest reseller on Flipkart.”
Offline handset retailers have been facing the heat from their online counterparts due to heavy discounts offered online, which they couldn’t match. This has also led to the formation of All India Mobile Retailers Association (AIMRA), a body that has vowed to work for the mutual benefits of brick-and-mortar retailers and maintain price hygiene across trade channels.
Samsung is not completely abandoning the e-commerce model though. The company’s spokesperson also said that a few models will still be sold exclusively on online sites in return for the promise that they are going to maintain the price sanctity of Samsung handsets. Earlier this month, Samsung made Flipkart the exclusive launch partner for the Galaxy S5 Mini.
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