As e-retailers look to clear their iPhone 5s stocks by offering discounts, the move seems to have upset the offline retailers, who according to reports are planning to boycott the iPhone 6 and iPhone 6 Plus sales.
With the latest offering from Apple scheduled to be launched around Diwali, it is understandable that most of the online portals want to offload their older stocks. This is evident as sites like Flipkart, Snapdeal and Amazon.in have dropped their prices, which offline retailers claim is lower than the device's cost price.
According to an Economic Times report, some of the 1.5 lakh offline Apple retailers have returned their stocks of the iPhone 5s as they're unable to compete with discounts offered by online players. The situation highlights a growing rift between offline and online retailers, where the latter, flush with cash can absorb huge losses.
"All over India, there is a huge uproar and heartburn among retailers against online sellers since their business and reputation is being lost," said Subhash Chandra, MD of retail store chain Sangeetha Mobiles, according to the ET report.
The growth of online retail has always seen resistance from owners of traditional brick and mortar stores, as they can offer the same goods at more competitive prices. In India, the growth of e-commerce is tied to the number of Internet users, which according to statics is growing at break neck speeds.
Moreover, there has been a stark shift in the way smartphones are sold in the country, with manufacturers entering exclusive partnerships with e-commerce players. Retailers such as Flipkart can free a manufacturer from paying middle men such as distributors, allowing them to pass on the benefits to consumers.
"The price difference is as high as Rs 11,000 on some models. Apple is liquidating stocks of the older models," said Titu Tanwani, one of the largest distributors of mobile phones in Jaipur, in the ET report. He added that retailers were protesting against local brands such as Micromax, Karbonn and Spice that recently launched their Android One devices in exclusive partnership with e-commerce players.
Change in the Indian retail space is inevitable, but manufacturers and online players must refrain from indulging in anti-competitive practices that hurt offline sellers. For now it seems that online players who have ample funding are willing to sacrifice profits in favor of growing market share and winning the trust of consumers.