Mainline mobile retailers, represented by the All India Mobile Retailers Association (AIMRA), accused Xiaomi-owned POCO of engaging in monopolistic and anti-competitive business practices that favour online sales channels.
In a letter to POCO India country head Himanshu Tandon, AIMRA said, “POCO’s strategy appears to establishing collusion with e-commerce platforms to distribute products through unauthorised channels, bypassing legitimate distributors and evading taxes”AIMRA, representing over 150,000 mobile retailers across India, intends to escalate this issue to the Competition Commission of India (CCI) and the ministry of finance and commerce to seek an investigation into POCO’s business practices.
According to retailers, currently, POCO is the only brand working exclusively online. In a separate letter to POCO, South Indian Organised Retailers Association (ORA) said the company’s purpose of exclusive online selling is squarely defeated and disturbing the mainline channel business. “POCO has been selling directly to consumers through online channels but the product is abundantly available in the grey market”.
In response to FE’s query on the matter, Tandon said, “with over 80,000 active retail partners nationwide with Jio Mart Digital, POCO India prioritises ethical business practices and strictly adheres to legal regulations”. “We value the feedback of the mobile association and retailers and aim to address their concerns fairly,” Tandon added. For distribution to mainline retailers, POCO has a strategic partnership with Jio Mart Digital.
According to IDC, POCO holds the eighth position in India’s smartphone market with a 4.9% share, experiencing a 54% year-on-year growth in smartphone shipments.However, mobile retailers claim that POCO’s smartphones are being supplied to retailers collaborating with e-commerce platforms through unauthorised means.
“This encompasses situations where both aggregators and students buy in bulk using credit cards and distribute to retailers without proper documentation or legitimate invoices, as the brand doesn’t utilise official channels,” said Navneet Pathak, national joint secretary of AIMRA.AIMRA attached screenshots of exclusive sales on Flipkart and bulk selling of activated devices by aggregators in retail to support their claims.
Since the company’s products are not available in mainline (offline) stores, many unorganised offline retailers as well as individuals purchase the same from e-commerce websites at discounts, they then sell the products to consumers, retailers said.
Through this practice, customers are also prone to be getting pre-activated phones, thereby compromising consumer safety, national security, as well as involve losses for the government.“The distribution of products through illegitimate channels not only hampers the circulation of cash within the country but also deprives consumers of their right to purchase from reputable retailers of their choice. This practice must cease immediately,” Pathak added.
In response, Tandon said, “POCO India is committed to offering customers a diverse range of purchasing options through legitimate channels, including a strategic partnership with Jio Mart Digital as our official offline distributor for mainline retail partners. We work with e-commerce platforms to expand our reach and ensure a seamless shopping experience”.
Even as AIMRA demanded urgent action from POCO to rectify this situation, it said otherwise, it would demand the cancellation of the company’s trading licence on continued anomalies and bypassing the law of land in India.