As if Samsung wasn’t facing enough heat from the market and the users, the dealers of Samsung are taking them on the retail and e-tail price gap. The representatives of Samsung Retail dealers have told Samsung if the massive discrepancies in prices are not stabilized, they may have to boycott the brand.
Samsung has not had a good time against the competition in the past couple years. The phones are seen as identical replicas of each other and their features are unable to compete with the likes of Motorola, LG and the latest entrants, Xiaomi and Asus. In fact, Samsung, which boasted of holding the throne of the biggest smartphone company in the top two populous countries in the world saw itself dip to 2nd spot. Micromax toppled Samsung’s majority in India and Xiaomi stole its spot in China.
The center issue is that Samsung offers its dealers a margin of 5.5% while the phones can be bought online for 20-25% discounts. The dealers say that they are not able to meet their sales targets as consumers are scared the prices might keep dropping. Times of India reports that some of the dealers have been selling the phones in wholesale markets to achieve their sales goals. These phones too make their way on the internet and are sold at discounted rates.
The dealers have threatened the company with a boycott that includes blacking out Samsung’s branding. Samsung executives have asked the dealers to not take any drastic steps as of yet. The dealer body has given the South Korean electronics giant time till the 15th of August to resolve the pricing issue. Samsung needs a strategy reanalysis if it wants to prevent a certain dip in sales numbers which includes focus on mobile innovation. Or else it won’t be long before they follow Nokia’s path.
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