E-Commerce Firms Account for 45-50% of Handsets Sale in India: ICEA

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ICEA alleged that this comes at the cost of offline retail business as there is extensive predatory pricing by e-commerce companies

Industry body India Cellular and Electronics Association (ICEA) said that last month, e-commerce firms have accounted for around 45-50 per cent of overall handset sales in India. The industry body alleged that this comes at the cost of offline retail business as there is extensive predatory pricing by e-commerce companies.

Predatory pricing

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“In the US, the mobile phones sale via e-commerce is probably 2 per cent. In India, it has reached 45-50 per cent as the e-commerce company’s pricing is highly predatory,” Pankaj Mohindroo, Chairman, ICEA told journalists at the launch of a joint report with McKinsey

E-commerce companies are doing something which they are not supposed to do. That is a big challenge,” he added.

Mohindroo further said that e-commerce industry is rapidly growing in the country, but it is at the cost of offline retail sector.

Impact on retail stores

He informed that around 45 thousand retails stores have been shut down in the past year, which is a major cause of concern. The association has conducted a small study in the Noida area of NCR and found that there were 1,148 mobile retail stores a year ago and now there are 950 stores left.

During the ongoing festival season, e-commerce firms, like Flipkart and Amazon, have sold mobile phones with heavy discounts of up to 62 per cent.

Mohindroo said the members of ICEA are themselves divided on the matter but the association is raising this matter for ethical and moral reasons.

The joint report by ICEA and McKinsey released at the event recognised the gaps in way the mobile devices sector in India achieving the status of global powerhouse. It also made suggestions on transforming the growing mobile manufacturing eco-system in the country.

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