NEW DELHI
OCTOBER 27, 2006

While Korean electronics major Samsung is moving ahead full steam with its campaign to counter parallel imports, the channel community in the region feels that the practice of parallel imports is not illegal in any way.  

“This is an age of globalization and if a dealer is buying Samsung products from other markets like Singapore, Hong Kong or Taiwan, there is nothing wrong in this. Dealers obviously pay the duty to the government so where is the question of illegality here? On the other hand we are all against resellers and dealers who are importing counterfeit products. I think that Samsung should concentrate its efforts on addressing the issue of counterfeiting rather than worrying about the parallel imports market,” explains, Jaideep Poddar, from Chandigarh based Independent Business Machines.

Speaking about this issue, Puneet Singhal, President at New Delhi based CMDA (Computer Media Dealers Association) said that there is no question about parallel imports as the channel players doing it always pay up the required duty to the government. “I do agree that channel players should provide proper MRP stickers and information about the content of products that they are selling. All the associations across the country are there to promote ethical practices, but the concept of parallel import is not illegal,” he added.

At a time when Indian market is being targeted by a number of players, experts in the industry feel that this issue might push small channel players to stop selling Samsung and instead work with other players like Canon, HP or Lexmark operating in the market, increasing their respective marketshare in a short span of time.

Dismayed by the company's move, there are channel players who are looking at discontinuing their business with Samsung. “If I am getting legal notices from Samsung, why would I sell the company's products? I might have to look at other options if nothing works out. I am sure that other vendors will be closely watching this issue as well,” adds a channel player from Kolkata on conditions of anonymity. 

Samsung moves to withdraw parallel import cases.
Meanwhile, Samsung has moved ahead to withdraw cases against those channel players, who have acknowledged the fact and given an undertaking that they will henceforth not be indulging in parallel imports of Samsung branded products.

“The matter has been amicably resolved with a majority of those named in the cases, who have acknowledged the fact and given an undertaking that they will henceforth not be indulging in parallel imports of Samsung branded products. For those who have given the undertaking, we will be withdrawing the cases against them,” informed, Sanjay Sharma, Vice President – IT Division, Samsung India.

“Even though, we still feel that there is not much clarity as far as illegality of parallel imports is concerned. We have been talking to Samsung and yes, the company has withdrawn case against Kolkota based Saboo Computers and we are now looking at educating our channel players in terms of ethical best practices in association with Samsung,” informed, VK Bhandari, CEO at Kolkata based Supertron Electronics.

As a part of its broader strategy to counter parallel imports, sources close to the company say that it is also working to have 'internal alarms' being put into service whenever there is a big buying happening in geographies like Hong Kong, Singapore or Taiwan. This way the company feels that it will be able to put tabs on the parallel imported products in India. 

Is there any way that Samsung can align itself with various channel associations in the country like Compass in Kolkota or PCAIT, CMDA in New Delhi on this issue? Yes says the company. “We have already initiated a dialogue with Compass and plan to work with them to educate the channel on the issue of parallel imports. We plan to take up this issue with other industry organizations as well,” Sharma from Samsung added.

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