16th Edition of FITAG TIMES

www.fitag.inMonday

01 12 2014Ahmedabad, Gujarat

Vol. 2, Issu No. 4, Page 8

Monthly Edition

FLOURISH KNOWLEDGE NETWORKING POWER PROTECTION

ITAGFor Space Booking in

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Sejal: 9824053863

Dhaval: 9824066111

FITAGTIMES

ITAGTIMES

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FITAGTIMES

ITAGTIMES

FIGHT Against Online

Round Table with CCI, ICT Associations and other government officials on

unfair trade practices of online marketplaces

Social ImpactLakhs of small business are getting disrupted in the

short term due to the tactics used by marketplaces

probably in connivance with brands and other

vested interest groups. This has a very deep social

impact for all people engaged in the retail and chan-

nel business. Delays in assessing this will lead to

unprecedented damage to the SME segment.

UnemploymentMember associations claim that the drop in busi-

ness volumes and erosion of profitability and the

increased pressure from brands to stock will compel

most SMEs to reduce their overheads leading to

loss of existing jobs.

Black MoneyA section of associations feel that the market places

are being used to launder and generate black

money. Though at this point in time there is no con-

crete evidence to support such an allegation , an in-

vestigation by the govt agencies on transactions is

required in order to identify how black money is

being deployed .

Online marketplace place owners are extremely bullish

about the prospects offered by the Indian arketplace and

India has now become the darling of international funds

and investors . However a close look at the chart here

shows how they operate and how their go to market strate-

gies are impacting lakhs of livelihood in the country. Flip-

kart the leading online marketplace in India which now

has a $7 Billion enterprise valuation has a net revenue of

about Rs. 179 crores and a loss of Rs. 400 crores.

The loss is funded by equity from foreign funds and the

losses have been incurred ma-

Strategy at what cost?

Contined on page-2

Dear Fitagians,

Something very uncommon

is happening across India.

A quest for survival has

brought all the IT associations

across India on a common plat-

form. We have formed Federa-

tion of All India IT

Associations – FAIITA. The

federation is informally

formed and four people from

four different corners of India

have volunteered to give their

services to FAIITA.

A movement has been ini-

tiated against the online shop-

ping menace and an India wide

Bundh on purchases of new

material from many OEMs

who have been listed by the

federation is declared from

15th December onwards.

FITAG leadership has played a

very aggressive role in decid-

ing all these line of actions. A

directive has been issued by

FAIITA on how to observe this

purchase Bandh is very clear

and self explanatory. I am

publishing a Gujarati version

for the same as under. ¾heËeLkku rðhkuÄ- FAIITALku Mknfkh

15 zeMkuBçkh 2014Úke Ëhuf ykExe

yuMkkuþeyuþLkLkkt Ëhuf MkÇÞkuLku ÃkkuíkkLke

ykExe Mkt÷øLk ðMíkwykuLke ¾heËe çktÄ fhðk

{kxu ¼÷k{ý fhðk{kt ykðu Au.

yk MktË¼uo FAIITA (Federation of AllIndia IT ASssociation) yu ònuh

fhu÷e rðMík]ík {krníke Lke[u {wsçk Au.

T1[uLk÷ ÃkkxoLkh ftÃkLke ÃkkMkuÚke ¾heËe fhþu

Lknª. T2 / T3 /T4 [uLk÷ ÃkkxoLkh T1 [uLk÷

ÃkkxoLkh yÚkðk ftÃkLke ÃkkMkuÚke ¾heËe fhþu

Lknª. T2 / T3 / T4 [uLk÷ ÃkkxoLkhku

ytËhkuytËh ÃkkuíkkLke ÃkkMku Mxkuf{kt Ãkzu÷ {xe-

heÞÕMkLke ¾heËe fhe þfþu.

OEM

T1 Channel Partner=

Companies

National Distributors (ND)/Regional

Mr. Kaushik Pandya

Editor

-Editorial

continued on page 3...

ITAGTimesFLOURISH KNOWLEDGE NETWORKING POWER PROTECTION

Articals 2www.fitag.in

Monday 01 12 2014

jorly due to redatory pric-

ing , marketing and brand-

ing , other expenses , in

order to capture market

share and to become a mo-

nopoly of sorts. What is

wrong with this strategy? In

a free market there is noth-

ing wrong in implementing

any strategy within the

legal provisions of the

country. However in our

opinion the strategy

adapted by the e-commerce

sites are in total violations

of the provisions of law ex-

isting in the country.

The graphic below

clearly points out that for

every rupee earned ( Net

revenue from transactions)

the e-commerce players are

losing an average of two ru-

pees. This strategy in our

opinion is to capture market

share by predatory pricing

tactics in order to put at risk

, lakhs of small businesses

with brick and mortar oper-

ations by luring their local

customers with predatory

pricing . India being a price

sensitive market , con-

sumers are an easy prey to

this strategy and majority of

consumers find it attractive

to save money on their pur-

chases. This in turn will

lead to cartel formation by

e-commerce sites who are

majorly owned by foreign

funds and who in our opin-

ion have got a back door

entry to retail FDI in India.

News papers report

-“Samsung, Sony & LGsuspend sales to Flip-kart; considering legalaction for "predatorypricing” . “Publishinghouses join hands tostop predatory pricing byFlipkart and Amazon”."Flipkart buys books from

us and then sells them at a

deeper discount through

WS Retail," says a book

publisher . Since books ,

mobiles and ICT products

have low return rates and

are bought by mostly the

educated class, they act as

the easiest way to acquire

customers.

ICT Channel associa-

tions in the country have

now decided to intensify

their actions to bring

awareness amongst govern-

ments, Agencies , OEMs ,

Members, Media and the

general public on the dan-

gers of predatory pricing

strategy that is being used

by e-marketplaces.<

Loss to state revenuesStates are losing tax revenues due to the fact that

many market places are exploiting the loopholes of

the existing state and federal laws . This was re-

cently found out in Kerala where the government

has temporarily banned eCommerce deliveries.

Predatory PricingThe Competition Commission of India (CCI) de-

fines “predatory price” as the sale of goods or

provision of services at a price which is below

the cost, as may be determined by regulations ,

of production of the goods or provision of serv-

ices, with a view to reduce competition or elimi-

nate the competitors.

Role of BrandsMost Brands are looking at emarketplaces as an-

other channel for increasing their sales and cus-

tomer base. No issues. Competition is welcome.

How ever MOP and MRP needs to be maintained

and strict and quick action to be taken against chan-

nels who are flouting norms. Who will do this ?

Recourse for SMEsCCI, Government of India , Political parties, Trade

Bodies , Judiciary are being approached with evi-

dence of predatory pricing . Initiated engagement

with OEMs, NDs , Associations , Media . Our

members are very badly affected and we have to

provide immediate relief and ensure a level playing

field.

CONTROL PREDATORY PRICINGIndian Information Technology (IT) Channels advise global brands to control predatory

pricing tactics of electronic marketplaces or face non cooperation from November 24 ,2014.

WHY?

Predatory PricingThe Competition Commission of India (CCI)

defines “predatory price “ as the sale of goods

or provision of services at a price which is

below the cost as may be determined by regu-

lations , of production of the goods or provision

of services, with a view to reduce competition

or eliminate the competitors.

Social ImpactMillions of small Indian businesses are getting

disrupted in the short term due to the tactics

used by electronic marketplaces probably in

connivance with brands and other vested inter-

est groups. This has a very deep social impact

on all people engaged in the retail and channel

business. Delays in assessing this will lead to

unprecedented damage to the SME segment.

10 November , 2014 New Delhi , India - A meeting of the Federation of All India

Information Technology (IT) associations was held on 7 November , 2014 in New

Delhi , India . The meeting was attended by leaders from all Regional IT Asso-

ciations including several state level associations . After detailed discussions on

the matters related to predatory pricing , unfair trade practices and the chal-

lenges faced by the channel community due to the online marketplaces the fol-

lowing resolutions were passed :

1The Associations representing the State of Punjab, Tamil Nadu, Chandigarh

and one district level association in Maharashtra who had stopped purchases

from Distributors till resolution of the predatory pricing issue were advised to call

off their voluntary restraint

and commence business

with Distributors with im-

mediate effect.

2All OEMs, Brands, Na-

tional Distributors are

hereby advised that they

should appreciate the

problems being faced by

the channel community

and take the following

compliance action on or

before 24 November ,

2014 :


Articals 3

UnemploymentThe drop in business volumes and erosion of prof-

itability and the increased pressure from brands to

stock will compel most SMEs to reduce their over-

heads leading to loss of existing jobs.

Loss to state revenuesIndian States are losing tax revenues due to the

fact that many market places are exploiting the

loopholes of the existing state and federal laws.

This was recently found out in the state of Ker-

ala where the government has temporarily

banned eCommerce deliveries.

Role of BrandsMost Brands are looking at emarketplaces as

another channel for increasing their sales and

customer base. Indian Channels welcome com-

petition. No issues. How ever MOP ( Market

Operating Prices ) and MRP ( Maximum Retail

Price ) needs to be maintained and strict and

quick action to be taken against channels who

are flouting norms. Some Brands are doing this.

So why not the others ?

Recourse for channelsCompetition Commission of India , Govern-

ment of India , Political parties, Indian and In-

ternational Trade Bodies are being approached

with evidence of predatory pricing . But Brands,

Distributors and channels are quite capable of

self regulation. We have initiated engagement

with OEMs, Distributors, Media and other

agencies. . We want a level playing field for all

stakeholders.

Black MoneyAre the market places being used to launder and

generate black money ? We seek an investiga-

tion by government agencies to quash this alle-

gation made by a section of people.

A)Ensure that MOP

(Market Operating

Price) and MRP

(Maximum Retail

Price) are in line with

operating prices at

which channels are

advised to sell. Sev-

eral local and global

brands have taken cor-

rective and preventive

action to ensure that

online marketplaces

do not undercut prices

directly or through

their sellers. All

Brands / OEMs have

their rights within law

to do so and are ad-

vised to put a system

in place.

B)Any incident where

violation of MOP,

MRP takes place the

OEMs/ Brand / NDs

(National Distributors

) must immediately

take corrective action

by ensuring that on-

line marketplace / or

their partners/sellers

are immediately

brought to books .

Such seller/ online

markeplace must be

prevented from doing

such transactions

again.

C)All Brands/ OEMs/

NDs are advised to

comply with the

above guidelines by

24 November, 2014 .

While the channel As-

sociations all over

India will continue to

do business with such

Brands/ OEMs/NDs

who comply with the

above requirement, the

entire channel commu-

nity across India will

stop doing business

with Brands/ OEMs/

NDs who do not com-

ply with the above

guide lines.

FITAG is now on Facebook. Please like Fitag page

https://www.facebook.com/Fitag23

Fitag thanks all member

associations to support

antipiracy drive & authorize

FITAG to deal in this

regard in future.

FITAG exe. committee

reaches to

21,000retailers / dealers across Gujarat

itag Times

www.fitag.inMonday 01 12 2014

Distributors (RD) who Purchase from

OEM/Carrying & Forwarding (C&F) Agen-

cies / Distributors

OEM

T2 Channel Partners

Companies

Sub Distributors (SD) Micro Distributors

(MD)/ Regional Distributors (RD) who

Purchase from ND

OEM

T3/T4 Channel Partners

Companies

Dealers/ System Integrators (SI) Retail

Partners / Exclusive Stores

rðþu»k LkkUÄ: su íku ftÃkLke MkkÚku «kÚkr{f íkçk¬u

òuzkÞu÷ fkuEÃký ðuÃkkhe ÃkkMkuÚke su íku ftÃkLkeLkwt

{xeheÞ÷ ¾heËðwt Lknª.

I urge to all Fitagians to followthese directive and support themovement. This is in our benefit andfor our own survival. Do not look atthe short term gains, if you havepressure of holding material kindlyapproach your local association andtake their support to fight against thismalpractice of OEMs.

Let's wish and pray for the success of this fight against online menace.

Continued from page 1...


Articals 4

This communication is for all entities in the Information Technology business in India like OEMs, Brands,

National Distributors (NDs), Regional Distributors (RDs) , Channel Partners, System Integrators (SI) ,

Retailers , ICT Associations , trade bodies , media, government ,others.

All India IT Associations push for level playing fieldAmeeting of the Federa-

tion of All India IT asso-

ciations was held on 7

November , 2014 in New

Delhi which was organised

by VAR India . The meeting

was attended by leaders from

all Regional Associations in-

cluding several state level as-

sociations . After detailed

discussions on the matters re-

lated to predatory pricing ,

unfair trade practices and the

challenges faced by our

members due to online mar-

ketplaces the following reso-

lutions were passed :1. The Associations repre-

senting the State of Punjab,

Tamil Nadu, Chandigarh and

one district level association in

Maharashtra who had stopped

purchases from Distributors till

resolution of the predatory

pricing issue were advised to

call off their voluntary restraint

and commence business with

Distributors with immediate

effect.

2. All OEMs, Brands, Na-

tional Distributors are hereby

advised that they should ap-

preciate the problems being

faced by the channel commu-

nity and take the following

compliance action on on be-

fore 24 November , 2014 :

a) Ensure that MOP ( Market

Operating Price) and

MRP (Maximum Retail

Price) are in line with op-

erating prices at which

channels are advised to

sell. For example Quick

heal, K7Computing, Sam-

sung Mobile and some

other brands have taken

corrective and preventive

action to ensure that on-

line marketplaces do not

undercut prices directly or

through their sellers. As

per our understanding the

Brand owner has all rights

within law to do so.

b) Any incident where viola-

tion of MOP, MRP takes

place the OEMs/ Brand /

NDs must immediately

take corrective action by

ensuring that online mar-

ketplace / or their part-

ners/sellers are

immediately brought to

books . Such seller / on-

line markeplace are pre-

vented from doing such

transactions again.

c) All Brands/OEMs/NDs

are advised to comply

with the above guidelines

by 24 November , 2014

.While the channel Asso-

ciations all over India will

continue to do business

with such Brands/OEMs/

NDs who comply with the

above requirement, the

entire channel community

across India will stop

doing business with

Brands/ OEMs/ NDs who

do not comply with the

above guidelines.

The IT Channel partners

in India are facing a

tremendous challenge as reg-

ular customers including

blood relatives are question-

ing the prices at which Chan-

nel partners are selling to

them. The above transaction

( in picture ) exhibits how a

SNAPDEAL customer is

walking away with a HP

LAPTOP at a price that is

lower than the transfer price

at which a HP Authorised

channel partner buys from

the Distributor. This also pro-

vides evidence of how using

Cash on Delivery (COD)

transactions , couriers collect

money lower than the In-

voice Value at which the

product is Billed. Brands like

HP say they are not providing

subsidies . The reseller in the

online market place is also

not selling at a loss. Then

who is subsidising the cus-

tomer and WHY ? This is a

clear case of a well bank

rolled Market Place trying to

eliminate competition from

Channel Partners such that

the Online Market places cre-

ate a dominance by building

volumes and killing channel

partners business. The losses

the marketplaces incur in the

next few financial years will

be carried forward and when

they take a dominant position

by eliminating the channel

partners , they will be pro-

vided with golden goose

products by BRANDS which

will give the Brands as well

as the online Marketplaces

huge profits . The online mar-

ket places due to the huge

losses they would carry in

their books will get away

without paying any income

tax.Brands benefit since they

are eliminating many players

in the distribution eco system

and they become cost effi-

cient. Is there anything

wrong with this strategy? In

a free market there is nothing

wrong with this strategy. But

we do not have any country

in the world which provides

a free market except the in-

ternet world? Even the inter-

net world is now saddled

with so many laws across so

many countries. We live in a

unfair world. But the least

that BRANDS can do is to

provide a transition plan and

establish a transparent com-

munication channel with

their IT Channels such that

these SMEs can reinvent

themselves well in time and

transform their business in-

stead of dying a death by

slow poison. Is it time time

for the Channels to RIP?

The same Lenovo IdeaPad

Y-50-70 with Laptop Bag

has a price difference of Rs.

10,000/- between Online

and Retail. Who is fooling

who ? Is this a fair practice ?

Senthil Kumar , one of our

members had to face the eire

of a customer who abused

him for selling a laptop at a

very high price . He had pur-

chased the laptop for resale

from the authorised partner

of Lenovo and to his utter

dismay found that the online

price was Rs. 10,000 lower

than the price that was oper-

ating in the market. He or-

dered the material from the

online market place and took

delivery . With this evidence

he informed his association

and said that he will recom-

mend that the Association

start a Quit Lenovo Move-

ment where all stocks held by

the channel are returned and

debit note is raised on the

partner / distributor .

There are several more

instances where such dispar-

ity in pricing is evident. In

the light of such transactions

and the fact that the market

places are well financed to

capture marketshare by

using predatory pricing

strategies , the Federation of

All India IT Associations

have started the process of

taking a four pronged ap-

proach in countering the

predatory tactics of players.

OEMs/Brands / NDs are

being approached to ensure

that level playing field is

maintained. Government de-

partments at the State and

Central Level are being ap-

proached for their support. A

complaint with complete ev-

idence is being filed with the

CCI Associations / Federa-

tions / Activists / Political

parties / Media / Public are

being approached and con-

sulted for their support in

creating a level playing field

and countering the predatory

pricing strategies of such

players. <



Articals 5

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ÃkuLkkuh{k íkiÞkh ÚkÞku, su ELxhuÂõxð

Ãký Au, yux÷u fu ykÃkýu ðerzÞku

òuE hÌkk nkuEyu yuðwt ÷køku, Ãký

{kWMkÚke zÙuøk fheLku yuhÃkkuxoLkk swËk

swËk ¾qýk íkhV Lksh Ëkuzðe

þfeyu!

yk 360 zeøkúe ðerzÞku {kºk

ÃkeMke{kt òuE þfkÞ Au, {kuçkkE÷

Ãkh fu Mkkhwt fÂLVøkhuþLk Lk

Ähkðíkk ÃkeMke{kt ELxhyuÂõxð

ðerzÞku òuðku nkuÞ íkku yu Mkøkðz

Ãký fhðk{kt ykðe Au.

yk ðerzÞku{kt fw÷ 24 f÷kfLkku

Mk{Þøkk¤ku Ëþkoðíkk ík{k{

E{uSMkLku xkE{÷uÃMk xufLkku÷kuS

ÍzÃke çkLkkðeLku yuf LkkLkk Ãk]ÚðeLkk

økku¤k Ãkh «kusuõx fhe nkuÞ yu heíku

Ëþkoðe Au. ykÃkýu yk ðerzÞku æÞk-

LkÚke òuEyu íkku ËwçkELkk yuhÃkkuxoLkwt

yuf yk¾wt xŠ{Lk÷ f÷kf fktxkLke

su{ Vhu Au yLku Võík 3.22

r{rLkxLkk yk ðerzÞku{kt yuhÃkkuxo Ãkh

yuf 24 f÷kfLke -rËðMk yLku hkík

- Ëhr{ÞkLk økríkrðrÄyku òuE

þfkÞ Au! yk MkkEx ÃkqhuÃkqhe íkiÞkh

Úkþu íÞkhu ËwçkE þnuhLkkt çkeòt Mk-

tÏÞkçktÄ òuðk÷kÞf MÚk¤kuLkk yk

«fkhLkk ELxhyuÂõxð,

{ÂÕx{erzÞk ÃkuLkkuh{k {kýðk

{¤þu.

yLkuf ykErzÞk, su çkË÷u ykÃkýe ËwrLkÞks

hk rð[khku fu ykÃkýwt yk

yk¾wt søkík fuðe heíku [k÷u

Au? Lkðe xufLkku÷kuS fuðe heíku

rðfMku Au? MkkËku sðkçk yu Au fu Ëwr-

LkÞk rð[khkuÚke [k÷u Au. {kýMk rð[khe

þfu Au yLku ÃkAe yuLku y{÷{kt {qfe

þfu Au. yux÷u yu ykøk¤ ðÄe þfu Au.

rð[khðwt yLku ÃkAe yuLku rðMíkkhðwt -

yk çktLku çkkçkík ykøk¤ ðÄðkLke yr-

LkðkÞo þhík Au.

ykErzÞkÍ ðÚko M«u®zøk - y[qf

rðMíkkhðk suðk rð[khku - çkMk, ykx÷k

rð[khLkk ÃkkÞk Ãkh, 1984{kt xuz

Lkk{Lke yuf LkkuLk«kurVx ftÃkLkeLke

h[Lkk ÚkE. xuz þçË çkLÞku

xufLkku÷kuS, yuLxhxuEL{uLx yLku

rzÍkELkLkk ºký Ãknu÷k yûkhÚke.

xuz MktMÚkkyu Ëh ð»kuo yuf fkuL-

VhLMkLkk ykÞkusLkÚke þYykík fhe.

Äe{u Äe{u íkuLkku Ãký rðMíkkh ÚkÞku. yk

fkuLVhLMk{kt rðï¼h{ktÚke, y÷øk

y÷øk ûkuºkLkk, ¾hk yÚkoLkk

{nkhÚkeykuLku yk{tºký ykÃkðk{kt ykðu

Au. yk {nkLkw¼kðku Mkk{u, íku{Lku {kxu

yrík {n¥ðLkk rð»kÞ Ãkh íku{Lkk

SðLkLke Mkðo©uc fne þfkÞ yuðe

Võík 18 r{rLkxLke MÃke[ ykÃkðkLkku

Ãkzfkh nkuÞ Au.

MkkEx Ãkh yíÞkh MkwÄeLke fkuL-

VhLMkeÍ{kt yÃkkÞu÷kt ©u»X «ð[LkkuLkk

1500 sux÷k ðerzÞkuÍ WÃk÷çÄ

fhðk{kt ykÔÞk Au. Mxus Ãkh hnu÷e

ÔÞÂõík yLku Mkk{u ykurzÞLMk{kt çkuXu÷e

ík{k{ ÔÞÂõíkyku ÷øk¼øk yuf s

MíkhLke nkuÞ yuðkt yk yËT¼wík

«ð[LkkuLkku ÷k¼ ykÃkýu rçk÷fw÷

{Vík{kt ÷E þfeyu Aeyu.

www.ted.com MkkEx Ãkh ík{u

xufLkku÷kuS, yuLxhxuELx{uLx,

rzÍkELk, rçkÍLkuMk, MkkÞLMk, fÕ[h,

ykxTMko, ø÷kuçk÷ EMÞqÍ ðøkuhu Úke{

ÃkhLkkt «ð[Lkku òuE Mkkt¼¤e þfku Aku.

òufu yk çkÄwt íkku y{urhfLMk {kxuLkwt,

y{urhfLk #Âø÷þ{kt nkuðkLkwt yuðku

yVMkkuMk Lknª fhíkk. ynª ELVkurMkMk

yLku ÞwrLkf ykEze Vu{ LktËLk rLk÷ufLke

EÂLzÞLk #Âø÷þ{kt ¼khíkLkk ¼krð

rðþu ðkík fhu Au, íkku n»ko ¼kuøk÷u Ä

hkEÍ ykuV r¢fuxLke ðkík {ktzu Au.

ykÃkýk økwshkíke «ýð r{†e yu{Lkku

rMkfMÚk MkuLMkLkku yËT¼wík rð[kh

Mk{òðíkk ynª nksh Au. íkku yLkwÃk{

r{© s¤ðkhMkkLke ðkík fhu Au.

{ÂÕ÷fk Mkkhk¼kE yLku «ku. yrLk÷

økwók Ãký ynª Au. yk{ktLkkt ½ýkt ¾hkt

«ð[Lk 2009{kt {iMkqh{kt ÞkuòÞu÷e

fkuLVhLMk{kt yÃkkÞu÷kt níkkt.

nS Ãký, Auðxu íkku çkÄwt #Âø÷þ{kt

s Lku ? yuðku rLkMkkMkku Lkk¾íkk nku íkku

Mkh«kEÍ, Mkh«kEÍ! ½ýkt

«ð[LkkuLkku rnLne, økwshkíke Mkrník

100Úke ðÄw ¼k»kk{kt yLkwðkË

fhðk{kt ykÔÞku Au. MkkExLkwt

LkurðøkuþLk yLku «uÍLxuþLk MkhMk

Au, «ð[Lkku su ðkíkkðhý{kt, su

heíku yÃkkÞ Au yu Ãký ½ýwt þe¾ðu

yu{ Au!



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FITAG Community EmpowermentAwards 2014

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16th Edition of FITAG TIMES