Lenovo, Toshiba tick off Indian e-tailers

mymatl

Disciple
The rift between online and physical retailers grew deeper on Tuesday, after technology giants Lenovo and Toshiba issued notices that warned consumers that e-commerce firms were not authorised resellers.

These warnings come a few months after camera major Nikon issued a similar notice, and a few weeks after IT hardware industry body MAIT convened a general meeting on how to tackle the issue of online retail.

“Buy it right. E-commerce websites like Snapdeal, Flipkart and Amazon.in are not authorised Lenovo resellers,” the Lenovo India notice says.

According to Shailendra Katyal, Director, Consumer Business, Lenovo India, a number of these online stores sell the company’s products at a heavily discounted price. “Our observation is that these may not be authorised resellers. Keeping our end-customer’s interest in mind, we have accordingly issued an advisory,” Ms. Katyal told this correspondent.

Toshiba India, on the other hand, warned that e-commerce websites should not pass on sales promotional schemes that are available only when purchased through the company’s authorised dealer network.

“Toshiba India does not have any direct arrangement with e-commerce websites, and they are not authorised to represent about the quality or fitness of any Toshiba-branded product,” the company said.

Both Flipkart and Snapdeal have reacted by saying that they take care to list sellers who have the necessary authorisation to sell the products in question.

“We can assure our customers buying Lenovo products on Flipkart.com that they are genuine. Customers will continue to enjoy the warranty and services extended to all original Lenovo products as always,” a Flipkart spokesperson said. A Snapdeal spokesperson reiterated that the company is a marketplace where authorised sellers list their products on the platform and that all Lenovo and Toshiba products on Snapdeal are genuine.

http://www.thehindu.com/business/Industry/lenovo-toshiba-tick-off-indian-etailers/article5703030.ece
 

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i really like this paranoia by offline dealers. in the 90s i remember some shopkeepers were so arrogant because only they had the required products and behaved rudely wih customers. now whenever you go to any tv/ mobile shop they are so over eager to pleae you and when you quote flipkart prices being lower, they defend saying such shitty statements like "we provide 3 day return warranty". idiots dont even know fk has 30 days. all these offline retailers, burn in hell m'fers
 
Please do note that the same offline retailers are often persons selling on online shops from across the country. Say cromaretail, IT Zone etc.,
Every coin has 2 sides. I only hope that this issue doesn't burst out like an epidemic.
 
a number of these online stores sell the company’s products at a heavily discounted price
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Our observation is that these may not be authorised resellers. Keeping our end-customer’s interest in mind
err..discounted price is not customer's interest? wow
I think this is mainly because the exclusive showrooms aren't making much sales/profits. I mean we can now get things at better rates online so...
 
Facing similar issue with Wildcraft backpack bought from Jabong. Went to Wildcraft for repair/replacement. Their representative was jealous and acted funny when he came to know that I got 75% discount.

There is definitely a fear among offline sellers. And, that is understandable due to plummeting sales affecting their business. But e-tailing is bound to happen.

Sometimes deals turn out unbelievable ( eg recently bought 6 pairs of Puma shoes at Jabong under 3.5k :D:D - actual work 20k); same cannot happen offline.
 
E-commerce is inevitable. If you or any our friends/relatives have an offline retail business, considering online options too is a good idea in the long term. If not, be prepared for more butthurt.
 
E-commerce is inevitable. If you or any our friends/relatives have an offline retail business, considering online options too is a good idea in the long term. If not, be prepared for more butthurt.

That being said, if even the prices offline are say 100-200 bucks higher - I still prefer buying the product offline. Getting my hands on the item instantly is a big plus for me. Couriers and waiting sucks. Offline retail will never be dead.
 
That being said, if even the prices offline are say 100-200 bucks higher - I still prefer buying the product offline. Getting my hands on the item instantly is a big plus for me. Couriers and waiting sucks. Offline retail will never be dead.
If the difference was 100-200 or even around 500, I would agree. But quite a few times the difference is much higher. E-commerce companies are splurging money on customer acquisition. Real profits on these might not be the immediate motive. This kind of price difference does affect retailers who cannot afford such discounts (or sometimes ecom players will offer a price better than retailers landing price).

I know of a phone shop which closed down as sales dropped drastically over last 18months. The guy told me that they just couldnt beat the etailers pricing. This is the issue.

I have just pointed out the issue at hand. As a consumer, I am pretty happy that I am getting good deals :)
 
I don't have a problem with e-tailers but they do need to be regulated properly. They get away with showing losses when there aren't any and thus don't have to pay a lot of taxes that they should have to pay. This on top of that they don't have any overhead expenses that a normal shop has. This obviously becomes an unfair ground for normal retailers to compete on. Taxation norms need to be changed so that these etailers can't get away with using loopholes to evade taxes and then we will see how they can manage to give such good prices. I know it is just wishful thinking but the problem should be nipped in the bud before these companies become too big.
 
... This on top of that they don't have any overhead expenses that a normal shop has. This obviously becomes an unfair ground for normal retailers to compete on...

but that's quite fair... etailers don't have huge overheads and therefore, they are able to pass on the benefits/discounts to consumers.
 
but that's quite fair... etailers don't have huge overheads and therefore, they are able to pass on the benefits/discounts to consumers.

They don't have huge overheads but they definitely have bigger inventories which would negate that advantage if they were paying their taxes right. However they use that big inventory as a tool to evade tax by showing no profit. This is what creates the unfairness.
 
Wonder what kind of tax evasion ecommerce guys do exactly since I know majority of local stores do a lot of tax / VAT evasion on cash sales which are never shown on paper etc. Doubt its possible in online sales since every transaction is documented for .. unless these guys do *jhols* of the highest order beyond our imagination =)).
 
Wonder what kind of tax evasion ecommerce guys do exactly since I know majority of local stores do a lot of tax / VAT evasion on cash sales which are never shown on paper etc. Doubt its possible in online sales since every transaction is documented for .. unless these guys do *jhols* of the highest order beyond our imagination =)).

What they do is not illegal. It is just a loophole they use and I tried to explain it in the Flipkart losses thread. It is something even Amazon does in US and that is never show profit by pumping the profits back in the company.
For example -
Let us say they buy products worth 100 cr when they start the business. Let us suppose they sell off stuff worth 35 cr for around 45 cr. However technically they are still in a loss of 55cr because of the unsold inventory. They re-invest this money after paying off the salaries and again buy more stuff. This way they can always show that they are making losses even when making profit and never having to pay taxes for those profits. Everyone can do that but small business owners are not some rich investors that can get away by not showing profits.
If you and I have a secondary source of income, even we can do the same by running a small business on the sides and keep reinvesting the profits into the business. But a normal retailer can't do that if this is his only source of income.
What I am trying to say is that taxation methods need to be changed. From what I have read taxes for companies is flat rate of 30% for Indian companies. So systems must be put in place that tax should be deducted at source for them before they are allowed to reinvest their profits back into the company. If not then any salaried individual should also be allowed this benefit. For example if I get a salary of Rs. 40k and if I invest that in a business that shows losses then no tax should be charged on that 40k. But the thing is such things won't happen because the rich are in power and that is why the rich are getting richer and honest hard working citizens are paying higher taxes. It is the same world over. They don't do anything illegal. They just make sure that the policies formed are in their favor. Prime example is Vijay Mallaya. He had deposited shares of his very successful United Breweries as security when he took the loan for Kingfisher Airlines. So why don't the banks sell of those shares to recover the money they have lost. Because our FM won't let the banks do their job properly and just compensate the banks from the taxes we pay.
I remember reading this somewhere that Warren Buffet paid 15% of his profits as taxes while his secretary paid 40% of his salary as taxes because taxes in the US were capped at flat 15% for capital gains. Many businessman moved their companies to other countries and in one particular case one billionaire even renounced American citizenship when USA decided to increase taxes for the rich.
 
Unfair and illegal are two different things. A lot businesses that aren't public do this and it is perfectly legal. However, would the common man consider it unfair? Yes, totally.
 
What they do is not illegal. It is just a loophole they use and I tried to explain it in the Flipkart losses thread. It is something even Amazon does in US and that is never show profit by pumping the profits back in the company.
For example -
Let us say they buy products worth 100 cr when they start the business. Let us suppose they sell off stuff worth 35 cr for around 45 cr. However technically they are still in a loss of 55cr because of the unsold inventory. They re-invest this money after paying off the salaries and again buy more stuff. This way they can always show that they are making losses even when making profit and never having to pay taxes for those profits. Everyone can do that but small business owners are not some rich investors that can get away by not showing profits.
If you and I have a secondary source of income, even we can do the same by running a small business on the sides and keep reinvesting the profits into the business. But a normal retailer can't do that if this is his only source of income.
What I am trying to say is that taxation methods need to be changed. From what I have read taxes for companies is flat rate of 30% for Indian companies. So systems must be put in place that tax should be deducted at source for them before they are allowed to reinvest their profits back into the company. If not then any salaried individual should also be allowed this benefit. For example if I get a salary of Rs. 40k and if I invest that in a business that shows losses then no tax should be charged on that 40k. But the thing is such things won't happen because the rich are in power and that is why the rich are getting richer and honest hard working citizens are paying higher taxes. It is the same world over. They don't do anything illegal. They just make sure that the policies formed are in their favor. Prime example is Vijay Mallaya. He had deposited shares of his very successful United Breweries as security when he took the loan for Kingfisher Airlines. So why don't the banks sell of those shares to recover the money they have lost. Because our FM won't let the banks do their job properly and just compensate the banks from the taxes we pay.
I remember reading this somewhere that Warren Buffet paid 15% of his profits as taxes while his secretary paid 40% of his salary as taxes because taxes in the US were capped at flat 15% for capital gains. Many businessman moved their companies to other countries and in one particular case one billionaire even renounced American citizenship when USA decided to increase taxes for the rich.
Er no?

Opening stock - 0 | Sales - 45cr
Purchase - 100cr | Closing stock - 65cr

Gross Profit (difference between left and right) - 10cr.

Less allowable expense - xxxx
-------------------

Net profit - xxxxx

Tax is charged on this net profit. Reinvestment is not a an allowable deduction. Unless you are doing something like Research or some specifically marked out activities that in general are leading to the nation gaining something or soemthing altruistic.

Each time you earn income it is taxed. Except for some marginal setoffs like in Capital gains that adjust for inflation and a slightly lower rate. And these are available to all assesses.

If anything smaller retailers get the benefit in many ways since they generally have income from a single shop distributed to a bunch of firms in different names, and getting the benefit of lower initial slab rates. These shopkeepers are just greedy and want that huge chunky margin they have enjoyed for years.
 
Er no?

Opening stock - 0 | Sales - 45cr
Purchase - 100cr | Closing stock - 65cr

Gross Profit (difference between left and right) - 10cr.

Less allowable expense - xxxx
-------------------

Net profit - xxxxx

Tax is charged on this net profit. Reinvestment is not a an allowable deduction. Unless you are doing something like Research or some specifically marked out activities that in general are leading to the nation gaining something or soemthing altruistic.

Each time you earn income it is taxed. Except for some marginal setoffs like in Capital gains that adjust for inflation and a slightly lower rate. And these are available to all assesses.

If anything smaller retailers get the benefit in many ways since they generally have income from a single shop distributed to a bunch of firms in different names, and getting the benefit of lower initial slab rates. These shopkeepers are just greedy and want that huge chunky margin they have enjoyed for years.


yes, it is TRUE.
 
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