Spacescreamer
Herald
KOLKATA: A fresh spat has broken out between manufacturers of white goods and e-commerce firms. Companies including LG India and Videocon are discouraging online sales of their televisions, refrigerators, microwave ovens, washing machines and air-conditioners, saying customers may have to pay for installation support, after-sales services and even repairs during the warranty period for products purchased on websites.
The powerful offline dealer network has sought a complete clampdown on online sales this financial year. Companies have no option but to act because these dealers generate most of their sales. Online shopping sites contribute less than 5% of their sales, except for smartphones, where the share is 20%.
Industry officials said LG India, however, is toying with the idea of partnering e-commerce firms to sell only its smartphones. LG India, the country's largest white goods maker, issued an advisory recently saying the company will not guarantee the originality of products, suitability and updated technology for Indian conditions and authorized after-sales service if they are purchased online, except from its own e-store.
Asked whether sales would be affected by not riding the e-commerce wave, LG India head (corporate marketing) Niladri Datta said consumer durable products are of high-ticket value and Indian customers still believe in touch and feel before making a purchase decision. Videocon, the third-largest white-goods maker, said in late April that products purchased from Snapdeal won't be eligible for warranty.
"The industry has been trying to come to terms with e-commerce by offering exclusive models, but still some sites like Snapdeal are trying to disrupt the market dynamics by undercutting prices and not following business terms," said Videocon chief operating officer CM Singh. He said the company has inked successful online sales agreements for sister brand Kenstar with websites such as Amazon.
E-mails sent to Snapdeal, Shopclues and Samsung seeking comment did not elicit any immediate response. Daikin and Haier, too, are advising customers not to make online purchases. Haier India president Eric Braganza said the company has discouraged its dealers from selling through some e-commerce sites. "We welcome e-commerce as one more channel for sales if they can operate in a correct way, which is, unfortunately, not happening," he said.
In response to an e-mail, Daikin India's customer care division said online sites and their associate sellers are not allowed to sell the company's products and hence such warranties would not be valid. Managing director KJ Jawa said warranties may be available for such purchases if the products are installed by an authorized dealer or representative.
The price of any electronic product includes a component for after-sales service, said Pulkit Baid, director of Great Eastern Appliances, eastern India's largest electronics retailer. "Due to predatory online prices, the companies have no option but to reduce after-sales support or work with the portals in tandem to improve the end price," he said.
Consumers face several problems for white goods purchased online. They are asked to pay for repairs even during the warranty period and produce tax invoices that are often not available for products purchased online. In some case, the product may be imported and ineligible for warranty.
A senior industry official said Samsung service centers charge customers if there are no valid tax invoices, although the Korean company hasn't issued any formal advisory.
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