Retailers and ecommerce firms clash over festive season discounts

Kolkata: The rivalry between traditional retail stores and ecommerce firms has reignited ahead of festivity.

Nearly 158,000 electronics and mobile phone retailers have jointly written to top manufacturers, saying several prominent brands are favouring ecommerce channels over offline retail. The retailers fear these brands will offer heavy discounts online during the festive season, which could dent the former's business by up to half.

The All India Mobile Retailers Association (AIMRA) specifically mentioned in letters to Samsung, Poco, Motorola, Realme, OnePlus and Iqoo that they were favouring the online channel.


Retailers, including large regional chains, have combined annual revenues of more than Rs 70,000 crore.

AIMRA alone represents more than 150,000 neighbourhood mobile stores, with total annual revenues of more than Rs 30,000 crore.

A OnePlus India spokesperson said both online and physical channels were equally crucial to its business aspirations in India, and said it would support both this festive season. The other brands cited in the story didn't respond to ET's queries.

Smartphones and consumer electronics are the largest sales contributors during festivity, a season that accounts for up to 30% of annual sales for brands.

Call for Same Schemes
With demand in these categories slowing this year, both offline retailers and ecommerce firms are relying heavily on a festive boost. This has rekindled their battle after nearly four to five years. Offline retail tends to lag online discounts due to higher overheads.

AIMRA founder-chairman Kailash Lakhyani said retailers are seeking transparency in operations and a level playing field. "We are engaged with smartphone companies, and are sharing our concerns with commerce minister Piyush Goyal, the consumer affairs ministry and the Competition Commission of India," he said.

The Association of Consumer Electronics and Home Appliances Traders, comprising 40 retail chains including Viveks, Great Eastern Retail, Girias, Pai Electronics and Digi1 Electronics, wrote to LG, Samsung, Whirlpool, Godrej, Apple and Panasonic last month, asking them to ensure products are not sold at "ridiculous or predatory prices" in online marketplaces and the brands' online stores. They also demanded the same cashbacks and EMI schemes across channels. "Even during the recent Independence Day sales, there were some instances of steep discounting. We are also going to write to the brands separately to ensure quick commerce platforms do not disrupt with steep discounting," said association president Raj Kumar Pai. The body's members have a combined revenue of Rs 25,000 crore.

The South India Organised Retailers Association too has taken up the issue with the brands. It includes 21 mobile phone retail chains in the south such as Poorvika, Sangeetha Mobiles, BigC Mobiles and SS Mobile, with 5,000 stores and combined revenue of Rs 15,000 crore.