(MENAFN - Muscat Daily) Grey imports are affecting business, senior officials from three major authorised distributors of mobile handsets in Oman have said.
Grey imports are brought into a country via legal but unofficial distribution channels. In the case of mobile handsets, small shops get original sets from neighbouring countries paying over 20 per cent less than authorised distributors who struggle to price their products competitively.
Manish Dubey, manager“ business development and special projects, Al Seeb Tech Est (SARCO), said that grey imports are widespread in developing countries. ''These kinds of practices are not classified as illegal as the products are not stolen and are original pieces. The only issue is that the way the products are sold is not approved by manufacturers. These products can be termed illegal only if they violate product regulations or the licensing contract of the manufacturer.
''The main reason for the existence of such a market is the price difference that exists in two different markets. For example, Japan's recession saw several of its manufacturers reduce prices to keep their market share. Parallel importers were able to undercut local distributors and retailers by buying stock from Japan.''
Dubey said that another reason for proliferation of grey imports is unavailability caused by a lack of focus on marketing by the authorised channel. ''A particular product may not be available in the market. This forces the consumer to look for alternative ways to acquire it.
''Parallel trade is especially prevalent in the cellphone market. In Oman, although no data is available, it is believed that 60-70 per cent of cellphones are sold through parallel trade,'' he added.
A senior official of an authorised Korean electronics distributor said, ''We suffer because of grey imports. As authorised dealers, we have to pay a fee to get TRA-type approval for every product. However, a majority of handsets in the market have been bought from small shops, and their prices are impossible to match. The handsets, bought in from a neighbouring country, are heavily discounted.
''Though the phones sold in smaller shops are original, customers don't get a proper countrywide warranty. In fact, some shops use fake parts when the handsets need repairing.''
An official from the authorised dealer of a European brand echoed the views of his competitors. ''We lose a lot because of this. We can't compete price- wise. The expense that goes into operating international standard showrooms and service centres with qualified technicians, coupled with the fact that unofficial dealers are getting devices for cheap, makes life difficult for us.
''There's even been cases of original phones sold with fake batteries. Some unscrupulous dealers don't hesitate to cheat customers. I urge the authorities to come up with stricter guidelines, and I urge customers not to get lured by cheap prices. Buy your electronics from a trusted source, always verify the paperwork and keep your r