PARALLEL IMPORTS

Parallel imports hit
authorized channel...

A large number of resellers are importing goods
of companies locally present in India. These imports are done from
countries like Singapore, Taiwan, Hong Kong and China.

Even after paying duties, there exists a huge
price differential between goods made available locally and those
available through parallel imports. As a consequence price points
come under pressure and the authorized channel takes a hit.

Absence of support is a critical factor...

Parallel imports impact the market in more ways than one. Price
points, without a doubt, are under pressure. The second most
critical factor is the lack of support from both the importer and
the manufacturer of the product. Importers promise support but
commitment to fulfill the same does not exist. Vendors also don’t
support products that have been imported parallelly into the
country.

Customers feel frustrated when warranty issues
are not addressed promptly and in the appropriate manner. There have
been instances where the market gets flooded with sub-standard
goods. The primary reason for this is to offset the losses that are
incurred by importers on providing support from their pocket.

Customer’s brand loyalty diminishes...

Channel partners who do business with the locally present arm of
the company are therefore always at a loss. Because of their
inability to match the price, sales conversions don’t happen.
Sometimes the price offered to the customer by parallel importers is
lower than our procurement cost itself. The probability of the
customer therefore coming back to us also goes down and the customer’s
faith in the brand also diminishes.

Devise mechanisms to curb parallel imports...

Companies should work out a mechanism to stop imports by anyone
other than their authorized representatives. The authorized entity
could be the company’s subsidiary itself. While a method to curb
such an activity is difficult, it is not entirely impossible.

Offer paid-warranty...

Even if the product is imported via the parallel route, vendors
should be committed to support it. The warranty issues should
therefore be addressed by the company and not resellers at their own
expense.

This strategy will help serve two purposes. One,
customers, having to pay for service during warranty, will
definitely not base their subsequent decisions to purchase only on
price. And second the interests of the authorized resellers will be
protected..

Parallel importers use
different means to import...

There is no denying the fact that products are imported
parallelly into the country. But these are only those products, which have
come to occupy a commodity status in the market. Otherwise the miniscule
volumes will not justify the efforts so taken.

The only way these parallel importers are able to sell
at a lower price is by using different ways and means to import. This is
the reason they are able to push into the market the same product at what
they call a better price.

Parallel import signifies a high demand...

There is a positive impact to it too. It is a definite sign that the
demand for the product in the market is high. And when such an instance
comes to our notice we ensure that the proper corrective measures are
taken.

We safeguard the channel’s interest...

On the flip side we have to admit that the price point is impacted.
Necessary price adjustments are made looking at the market and the trend
in the market. But we take all the necessary steps to ensure that our
authorized channel does not suffer at any point. And we work towards
safeguarding our partners’ interests.

Parallel imports can only be limited...

It is virtually impossible to develop a mechanism to stop the parallel
import of goods into the country. We may only be able to limit this. We
can completely stop imports directly from, let’s say Taiwan, but then
the goods can be routed from Taiwan into India through other countries
like Singapore and Dubai, which are free markets.

Besides no company is a statutory body that has the
right to impose restrictions of this nature. So we have to work towards
developing a mechanism to make this proposition less lucrative. We
constantly advertise to spread awareness about our authorized channel
network and undertake other exercises too to promote our channel.

We give support to importers...

We are totally committed to our customers and the market. We take
total ownership of our products. Though at times, we may refuse to offer
support to end-customers who approach us with parallelly imported products
or may charge him for the same. This is to make the buying of parallelly
imported goods less attractive.

But if an importer approaches us to address support
issues, we undertake servicing and support. The concerned customers may
get back to the importer from where they have purchased our goods for his
warranty-related problems.