The year is 2020, and offline retail is no longer as attractive of a segment as it once was, but that doesn’t mean it’s willing to go out without a fight, as Samsung keeps getting reminded. Cue yet another angrily worded letter that ended up on the desk of Samsung India chief, Ken Kang. Authored by the All India Mobile Retailers Association (AIMRA), the letter accuses the company of employing predatory tactics in order to drive sales to its online channels at the expense of offline retailers.
While the futile task of propping up a declining retail channel is hardly Samsung’s responsibility, AIMRA’s letter, detailed today, does appear to raise some legitimate ethical concerns regarding the way in which the firm goes about doing business. More specifically, it alleges Samsung sent gift vouchers worth Rs 10,000 ($135) on Galaxy Note 20 purchases to customers who already pre-booked their flagships through mom-and-pop stores throughout India. “Misleading” in the sense that they worked, but could only be redeemed at Samsung.com.
India’s offline retail is dying, but Samsung’s not just a bystander
What’s more, offline retailers in India are accusing Samsung of misusing their customers’ pre-order information, as some who pre-booked one of the new Galaxy Note 20 models through third-party sellers have subsequently received personalized discounts for buying them from Samsung.com. The extra savings weren’t massive, only amounting to an extra Rs 2,000 ($27) on top of the aforementioned discount, but every little thing makes a difference in the ruthless world of retail. And Samsung, one of the world’s largest and most successful companies, can’t justify such predatory practices, AIMRA argues.
If all of this sounds familiar, that’s because it is. AIMRA most recently blasted Samsung over its approach to retailing the Galaxy M series a couple of months ago. Back in February, it even staged a three-day boycott of the Korean giant over identical complaints about its Galaxy S20 sales strategy. On that occasion, the crux of the issue were promotional activities stemming from Samsung’s collaboration with another tech giant in Amazon.
Samsung’s position on the matter remained consistent throughout the years. The company claims its approach to sales is channel-agnostic, whereas its pursuit of sustainability focuses on product innovation instead of retail gimmicks. That is, it isn’t concerned with picking a retail channel on the consumer’s behalf. On the other hand, it’s growing online focus is hardly a surprise. Between the stay-at-home reality that this year brought about and its massive successes in the segment, there’s no way Samsung willingly slows down its newfound momentum in India. So, as controversial as this episode appears to be, majority-offline electronics distributors in India would probably be wise to invest their energy into becoming part of the retail future instead of criticising the present – or past, if we’re being cynical.