The All India Mobile Retailers Association (AIMRA) has called for a ban on Chinese smartphone brands iQoo, Poco, and OnePlus, alleging anti-competitive practices that harm local businesses and the Indian economy. The association has sought the intervention of Commerce and Industry Minister Piyush Goyal and Finance Minister Nirmala Sitharaman, urging them to cancel the licenses of these companies.
Exclusive Agreements and Grey Market Concerns
AIMRA, representing over 1.5 million mobile retailers in India, accuses these brands of maintaining exclusive distribution agreements with e-commerce giant Amazon, bypassing traditional retail channels. This practice, they argue, marginalises local retailers and denies the government tax revenue from offline sales.
“Despite CCI reports and persistent follow-ups, these companies continue to violate regulations by maintaining exclusive agreements with e-commerce platform Amazon and refusing to distribute products through retail stores," stated Kailash Lakhyani, Founder and Chairman of AIMRA.
Furthermore, AIMRA raises concerns about unauthorised product diversion from online to offline channels, disrupting the flow of funds and undermining fair trade practices.
Impact on Local Businesses and the Exchequer
Lakhyani highlights the negative impact of these practices on local businesses and the Indian economy:
Marginalisation of Retailers: Exclusive online distribution limits opportunities for local retailers.
Reduced Tax Revenue: Grey market activities and online-only sales deprive the government of potential GST revenue.
Limited Consumer Choice: Customers lose bargaining power and face restricted choices due to the lack of offline availability.
Vivo's iQoo as a Case Study
AIMRA specifically cites Vivo's sub-brand, iQoo, as a prime example of these practices. The association claims that iQoo primarily sells its products through online platforms like Amazon, Flipkart, and its own online store, despite repeated requests for wider retail distribution.
"IQOO smartphones, a sub-brand of Vivo Mobiles, which is currently under investigation by the Enforcement Directorate for a money laundering case. Additionally, Vivo’s name has surfaced as an offender in the latest findings by the Competition Commission of India (CCI). Despite our persistent efforts, we have encountered continuous delays and no progress in billing retailers," Lakhyani said.
Call for Government Action
AIMRA has appealed to the government to take decisive action against these companies.
"We request your intervention to escalate this issue to the Hon'ble Commerce and Industry Minister, Piyush Goyal, and Finance Minister, Nirmala Sitharaman, calling for the cancellation of licenses for such companies. It is crucial to protect local businesses and uphold fair trading practices in our country," Lakhyani stated in a letter to Member of Parliament Praveen Khandelwal.