Dell issues advisory against parallel import to partners

In a bid to educate
channel partners on the prevalence of parallel importers, who are
allegedly spoiling the market of genuine channel partners of href="http://www.dqweek.com/Dell-issues-illegal-import-warning-to-partners">Dell
India, the company has identified, and issued names of 11 partners,
found indulging in parallel imports, grey market and refurbished
products. The vendor has
sent out an official email to its channel partners, a copy of which
is with The DQ Week. In the email, Dell has written that some
partners have been identified indulging in sale of Dell products
which have not been procured from Dell. These products have been
secured from an unauthorized channel, by way of parallel imports, but
are being sold in the Indian market.

This is totally
unacceptable to Dell. The company will not take the responsibility of
any kind of service support for the grey market, imported,
refurbished products sold through these partners. While informing
about steps taken against parallel importing, Sanjay Yadav, country
head, sales and distribution, CSMB, Dell
India said, “We are investigating the issue currently, and the
intention of the communication to channel partners was to ensure,
that the larger interest of the channel market is maintained. Also,
we are able to keep our channel partners informed about the
repercussions of indulging in grey market
sales that impact not just Dell, but the industry in general.”

The intention is to
educate Dell's channel partners on the advantages of buying
products directly from Dell India vis-à-vis securing them from
unauthorized means. The channel partner is an important point of
contact for Dell's consumer segment and confusion within the
channel ultimately affects customer satisfaction as the partner is
unable to offer the consumer the benefits associated with the
purchase of authorized Dell India products. From the channel
partner's perspective, their indulging in grey market transaction
and transactions effected in the violation of Dell's policies,
affect their partnership with Dell in terms of losing the benefit of
participating in channel partner schemes floated by the vendor, such
as Dell Gainz and Dell Empower.

Yadav added, “That
apart, they will also be unable to offer consumers the benefit of
warranties and of value-added services
like CompleteCover, and customer solutions like Dell Stage, Seventymm
and Healthhiway, which are available to consumers only on purchase of
authorized Dell India products. This communication also seeks to act
as a deterrent and as a protective measure in respect of those
channel partners who transact in grey market products not being fully
aware of the possible repercussions of such dealings.”

According to Ashok Taneja,
owner, Softech Computers Delhi, a distributor for Dell laptops and
desktops, “Parallel import has come down over the years, but still
there are some partners who get opportunistic pricing from
other countries and dump the material in the Indian market. Parallel
import is not an ethical affair, as it does not cover warranty
support. Dell is coming out with full support with its genuine
partners and taking corrective action against parallel importing.”
While contacting parallel importers, whose names have been identified
by Dell, The DQ Week learned that one of the
Mumbaibased parallel importers is taking legal advice on parallel
importing against Dell and the matter has been subjudice.

As per an industry
insider, parallel importing is not an illegal activity in India, as
these importers buy products in bulk from overseas and sell them in
the Indian market after duly paying all import duties and local
taxes. As these products are cheaper overseas, it helps the partner
in maintaining a healthy profit margin. However, most vendors deny
local warranty support on these products. In the words of Magdoom,
director, Geeyess Imports & Exports, “We have been importing
Dell laptops from Dell's Kuala Lumpur-based authorized distributor
and selling them to wholesalers in India. Beside this, we are also
importing other IT products like laptops, RAMs, DVD writers and pen
drives etc.” According to PN Prasad, advisor, Confed-ITA, “Parallel
import exists due to huge markup of products in India.”