Deep Discounting scaring Big Brands - LG, Videocon, Godrej
Brands like LG, Videocon and Godrej are really not happy with their products being sold at big discounts on Flipkart, Amazon and Snapdeal during festival sales as they fear that the deep discounts that pulled prices below cost could negatively affect their brand image as well as harm sales through the brick-and-mortar stores.
With online prices that are 10-15% lower than the ones they offer to distributors and dealers,they are taking steps against it suggesting that this is in violation of ecommerce regulations.
Since ecomm giants have denied any violations and said that they only provide a platform and that pricing is up to the sellers or brands.
- LG issued a letter to warn consumers that products sold at lower prices might be counterfeit and has suspended half a dozen dealers who sold online.
2.Videocon warned its trade partners that online prices have to be at par with those offline or it will cut off supplies and also cautioning consumers that no warranty is available for LED TVs, washing machines and refrigerators purchased online.
Manufacturers are not against online sales but against the pricing. Inspite of in agreement with manufacturers to maintain a level playing field with offline trade since two years,online portals may deviate from that as they battle it out for market share with their festival sales.