Online marketplace owners are extremely bullish about the prospects being offered by the Indian market, and India has now become the darling of international funds and investors. Taking this into account, a meeting of the Federation of All India Information Technology Associations organized by VARINDIA was held on 7th November, 2014 in New Delhi. The meeting was attended by the president/secretary from all the regional IT associations and several state-level associations, including PCAIT, ADCTA, PACT, AIT, ACMA,FITDAK, TCCDA, COMPASS, CIITA, FITAM, ITAO, ISODA, SIITA and ASIRT.
To combat the predatory march of e-tailers and in support of the issue, the key speakers who participated at the conclave included B. Hari, President, CIITA (East); Champak Raj Gurjar, President, FITAM (West); Alok Gupta, President, Progressive Channels’ Association of Information technology (PCAIT); Swarn Singh, Joint Secretary, All Delhi Computer Traders’ Association (ADCTA); Shyam Sunder Modi, Chairman, All Delhi Computer Traders’ Association (ADCTA); Kshitij M.Kotak, President, (ASIRT); K. K. Sharma, Strategic Consultant;K. L. Lalani, Chairman, COMPASS; Gurpreet Singh, President, (PACT); Sanjeev Walia, President, Chandigarh IT Association; Sanjeev Bhavnani, Chairman, Menterprenure Advisors; Nalin Patel, Vice-President, SIITA;Hiren Shah, Joint Secretary, ACMA, Ahmedabad; Arun KumarDey, President, ITAO, Bhubaneswar; Gurpreet Singh Sunny, President, PACT, Ludhiana; Veera Swamy, President, Twin Cities Computer Dealers'Association, Hyderabad; and KavitaSinghal, Vice-President, ISODA, M. Veera Swamy M, President, TCCDA, M. Natarajan, President, Confedita, Tamil Nadu, Mr. Senthil Kumar M, President, Sneham and Nalin Patel, Vice-Presidsent, SIITA, Bengluru.
The objective of the meeting was to arrive at a consensus amongst all the Presidents of the national IT traders associations to prevail upon the Government to come up with a suitable online policy, which suits e-commerce portals as well as traditional channels. It also desired to seek support at a national level to put pressure on the vendors to come up with a concrete solution to curb the online price parity that still continues to persist. Indian Information Technology (IT) Channels advised global brands to control predator y pricing tactics of electronic marketplaces or face non-cooperation from November 24, 2014.
After detailed discussions on the matters related to predatory pricing, unfair trade practices and the challenges faced by the channel community due to the online marketplaces, the traditional ICT channels were left with only one option, i.e. to follow the basic principle “Stand United” as they can do much better business with their combined strength. The meeting concluded with the following resolutions:
1. The associations representing the states of Punjab, Tamil Nadu, Chandigarh and one district-level associations in Maharashtra which had stopped purchases from Distributors till the resolution of the predatory pricing issue were advised to call off their voluntary restraint and commence business with Distributors with immediate effect.
2. All OEMs, Brands and National Distributors are advised that they should consider the problems being faced by the channel community and take the following compliance action on or before 24th November, 2014:
a) Ensure that MOP (Market Operating Price) and MRP (Maximum Retail Price) are in line with the operating prices at which channels are advised to sell. Several local and global brands have taken corrective and preventive action to ensure that online marketplaces do not undercut prices directly or through their sellers.
b) Any incident where violation of MOP, MRP takes place the OEMs/ Brands / NDs (National Distributors) must immediately take corrective action.
c) All Brands/OEMs/NDs are advised to comply with the above guidelines by 24th November, 2014. While the channel associations all over India will continue to do business with such Brands/OEMs/NDs who comply with the above requirement, the entire channel community across India will stop doing business with Brands/OEMs/NDs who do not comply with the above guidelines.
Finally, ICT Channel associations in the country have decided to intensify their actions to bring awareness amongst Governments, agencies, OEMs, members, media and the general public on the dangers of predatory pricing strategy that is being used by e-marketplaces.
Major Issues faced by IT Associations of India
Predatory Pricing:
Social Impact:
Unemployment:
Loss to State Revenues:
CONTROLLING PREDATORY PRICING
