The Indian e-commerce industry is booming thanks to lucrative discounts and exclusive partnerships secured by various retailers. However, the biggest obstacle to the continued success of the segment in India may come from within as several brick and mortar retailers have formed a coalition that aims to curtail the benefits offered by e-tailers.

Retailers take the fight to e-tailers

The issue began earlier this year, when retailers began questioning the heavy discounts offered by e-commerce stores, which in turn was cannibalizing sales from offline channels. The retailers took up the matter with the hardware vendors directly and were able to convince brands like Lenovo against selling their wares online. Lenovo (HKG:0992) even had a notice on its website stating that its products were to be purchased only from its official site or from its offline distributors. The brand’s managing director for India, Amar Babu, said that the goal was to establish price normalcy. “We are trying to weed out unhygienic practices to create a healthy environment between online and offline markets,” he is quoted as saying.

Even Samsung (KRX:005935) was said to be swayed, and is rumored to be considering going offline in the country. While there hasn’t been any official confirmation from the South Korean vendor yet, going offline may offer a solution to declining sales. Sony (NYSE:SNE) is also joining the fray and is advising users to buy from its own authorized stores. LG (KRX:066570), meanwhile issued a statement announcing that it has the right to withhold warranties for products purchased from online stores other than its official website in the country. Canon (TYO:7751) has taken a different route, and is said to be considering offering a unique set of products for online sales.

As for retailers, a new body called the All India Mobile Retailers’ Association, which claims to represent over 10,000 brick and mortar retailers, has been created to look into the pricing practices carried out by online vendors.

E-commerce stores go exclusive

The main issue with online stores is that the stores themselves have no control of the pricing. Stores like Amazon and Flipkart follow a marketplace model, which means that the third party sellers effectively have full control over how much price they can set on a product.

The result is that when it comes to mobiles – the biggest selling category in e-commerce in India – stores offer discounts up to Rs. 3,000 ($50) from what is available offline, not including the freebies that come bundled with purchases. The sellers that were selling the wares procured the goods at a wholesale price, which is noticeably lesser than what the consumer pays for a device. This is how they were able to mark down the price of a handset and still gain a profit. The offline stores were not able to follow suit due to the overhead costs from stocking a device in a brick-and-mortar store.

While offline retailers have sought to get products removed from e-commerce stores, sites like Flipkart (BOM:514215) and Amazon (NASDAQ: AMZN) have formed collaborations of their own. Flipkart in particular was able to secure exclusive partnerships with Motorola and Xiaomi, which saw the site become the only authorized location to get products from either vendor in the country. Amazon has not been as successful, although it did manage to get exclusive rights to the Xbox One in India. Along with exclusive deals, the sites regularly run deals and offers, although a recent deal by Flipkart resulted in further tension between offline and online vendors.

Big Billion Day

While the idea behind Flipkart’s Big Billion Day sale held on October 6 was admirable, the execution was far from it. For one day only, the site offered heavy discounts on over 10,000 products across all categories, and ran hourly deals that saw prices of products slashed by as much as 80%. However, the site failed to load for most of the day, and products were sold out in under five seconds of going on sale. That’s not to say the retailer did not do a lot of business. Flipkart claimed that it sold goods worth over $100 million in just 10 hours.

The sales figure is the only good thing to come out of what is being termed a debacle, as both consumers and vendors have lodged complaints against Flipkart for the sale. Consumers mentioned that the site was misleading in the offers it quoted, while hardware vendors said that they did not authorize the heavy discounts that were posted during the sale. Sony’s Indian sales head Sunil Nayyar was particularly vehement about the practice, stating that, “the online sale war of Monday (Big Billion Day) was really disappointing and alarming. This is not the way we have agreed to do business as partners. We have decided to handle online discounts now with an iron hand and will ensure Sony is not involved again and there is a fair play for all channels.”

A complaint has been filed earlier this week with the Competition Commission of India to further investigate the issue, and to look into the discounts that were offered by all e-commerce sites during the festive season, which ran the length of October.

At the end of the day, it is clear that the disagreement comes with the disparity in pricing. Offline retailers want to be able to maintain their markups, and since they’re in the majority for now, they have enough clout to influence the decisions of the manufacturers. It is frustrating to see vendors fighting over discounts and seeking measures to curtail such practices, which in fact benefit consumers. One of the reasons for the massive growth of the e-commerce segment was the discounted prices from offline channels, and although it looks like retailers will be successful in cutting down on what they call “unsustainable pricing”, it is not hard to see that it is they who will lose out in the end and more and more consumers start buying online.

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The Indian e-commerce industry is set to witness a dramatic change in the way it functions as offline retailers seek to curtail the “unsustainable pricing” practices that are being followed by sellers online. The move to limit heavy discounts and delist products from online stores is a direct result of complaints levied by retailers to hardware manufacturers.

According to offline retailers, who contribute to a bulk of sales in the country, there is no check on the prices being set by e-commerce stores as they follow a marketplace model, which gives full control as far as prices are concerned to the third-part sellers listing products on the sites. The manufacturers have thus far sided with the retailers in the battle, with several vendors like Sony (NYSE:SNE), Lenovo (HKG:0992) and LG (KRX:066570) advising users to only buy products through their official websites in the country.

Amazon India and Flipkart, the leading e-commerce website in the country, have come under a lot of criticism and are set to face scrutiny by the Competition Commission of India, a government body that investigates malpractice.

To read the full story, head to VR World, Bright Side of News* Asia-Pacific sister site.

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At an event in New Delhi, Motorola (NYSE: MSI) unveiled the new Moto G for the Indian market, with the device set to go on sale later today on Flipkart. Like the first-generation Moto G, the latest model offers great value for money. As is becoming the case with more and more manufacturers, Motorola has taken the “if it ain’t broke, don’t fix it” motto with the new Moto G. Barring slight visual changes, the new Moto G is virtually identical to its predecessor.

The new Moto G features a 5-inch 720p display, the only major change in terms of the hardware. The larger screen is a noticeable jump when seen against the 4.5-inch screen of the Moto G, although other than the device being slightly taller, in terms of the form factor, the new Moto G is almost identical to the older handset. Design has been altered, with the Moto G looking more like a stretched out Moto E thanks to the placement of the speakers at the front.

Another notable addition is the 8 MP shooter at the back, from the 5 MP version that was included in the first-gen Moto G. The front shooter at 2 MP is also better than the 1.3 MP shooter that is available on the first-gen Moto G. The new model comes with a microSD card slot, a feature that was one of the most requested in the previous generation.

Otherwise, the hardware is identical — the new Moto G also comes with 1 GB RAM, 8/16 GB internal memory variations, Snapdragon 400 SoC with quad-core 1.2 GHz Cortex A7 CPU, Bluetooth 4.0 LE, microUSB 2.0 and 2070 mAh battery. The new Moto G has a newer Wi-Fi modem that brings Wi-Fi 802.11 ac connectivity, which is indicative of the general trend in the handset market, which is seeing more and more mid-tier devices featuring the latest Wi-Fi standard.

As has been the case for Motorola ever since its resurgence, the Moto G in India will be sold exclusively on Flipkart, with sales set to commence at 12 AM tonight. The 16 GB version of the device will be available at Rs. 12,999 ($215); which is Rs. 1,000 ($16) less than what the first-generation Moto G launched for in the country. With the launch of the new model, Flipkart is halting sales of the older Moto G. At the price, the new Moto G is a great recommendation, but the launch of the device has left owners of the first-gen Moto G with a sour taste, considering the older model itself made its debut in the country in March. Barring that, the new Moto G is a great handset for the price it commands, and should continue Motorola’s growth in the country.

The post Motorola Enlarges Moto G, Offers Same Great Value For Money appeared first on VR World.

HTC launched its Desire 516 Dual Sim in India with a budget price tag of Rs. 14,200 ($237 USD). It is being seen as an alternative to the higher priced Moto G Dual Sim at Rs. 19,999 ($333 USD) or about the equivalent of $100 less.

Motorola customers may be ready to make the change not only because of price, but also because of dissatisfaction with performance. Some units of the Moto G with unregistered IMEI numbers would not work on domestic networks in India. Motorola offered affected customers full refunds, replacements, and credits to their Flipkart account.
The HTC Desire 516 claims to run on a 2G network (GSM 850/900/1800 – SIM1 & SIM2) and a 3G network (HSDPA 900/2100). The geo tagging camera is 5 MP, 2592 х 1944 pixels, with LED flash as well as a front facing 2MP camera. Both the HTC and Motorola include video recording. The HTC display has 16M colors, identical to the Motorola unit it is being compared against.

HTC Desire 516

The HTC has 1GB internal memory while its microSD stores up to 32 GB. You’ll get an Android OS v 4.2.2, with a Qualcomm Snapdragon 200, Quad-core 1.2 GHz Cortex-A7, Adreno 302 and accelerometer. Browsing is with HTML5. It runs on a removable, rechargeable Li-polymer 1950 mAh battery.

The Moto G has a more current operating system: Android version 4.3 Jelly Bean upgradable to KitKat, v4.4.3. It comes with Snapdragon 400 and Adreno 305. The phone has a 5MP 2592 х 1944 auto focus camera and LED flash. The second camera is 1.3 MP. This display has Corning Gorilla Glass 3 protection. The internal memory is the same as the HTC model, 1GB, but there is no card slot. The Moto G runs on a non-removable Li-Ion 2070 mAh battery.

Yes, the HTC Desire 516 Dual Sim can be considered as a cheaper version of the Motorola Moto G Dual Sim, but that depends on what you want in a mobile phone. There are some noticeable differences besides price.
HTC fans or anyone looking to change unit brands might want to look at a review of the HTC One M8. It also sells on Flipkart with a bigger price tag – Rs 45,249 ($754 USD) – more than double the two less expensive units addressed in this article.

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