India is one of the few markets where the offline retail channel still reigns supreme, even as a large part of the population has embraced e-commerce. It's also a highly competitive smartphone market and brands that compete there have to strike a balance between their online and offline sales strategies.
However, retailers in India have started to feel that Samsung is now favoring online sales over those from its brick-and-mortar partners. They say that Samsung isn't maintaining price parity of select devices, particularly the M series, to increase online sales as that wouldn't require Samsung to give margins to offline retailers.
Retailers in India are not happy with Samsung
Mobile retailers in India accuse Samsung of selling its mid-range devices for cheaper online so that customers prefer buying from online channels. It provides a margin to offline retailers and that obviously eats into the company's profitability. Cutting costs here would enable Samsung to increase profitability.
Samsung isn't the only one that's doing this in India. The retailers say that they didn't receive new stocks from smartphone manufacturers for up to 25 days after the online launch this past month, and when they did get the stock, it just wasn't enough to meet demand. This meant that customers were essentially forced to purchase the phones online.
The All India Mobile Retailer Association has also raised the issue of price disparity between online and offline channels with Samsung. “We have already written to you regarding the preference of stocks in offline trade, especially during times of COVID-19 when retailers have suffered immense losses due to the lockdown. Samsung must rethink and maintain the same price for both channels,” the association wrote in a letter to the company.
Samsung has ramped up its online sales efforts in India over the past few months, particularly after the COVID19 lockdown. For example, it now offers finance options at customers' doorstep. It has also been helping out its offline retailers during these difficult times.
Samsung India brought 20,000 retailers online so that they could sell devices to customers in their locality. The company later expanded this program to cover consumer electronics retailers as well.
