CHEAP IMPORTS vs BRANDED PRODUCTS

Customers happy with service... 

One fact that has accelerated the acceptance of inexpensive imports in India
is that the company which sell them make sure that they offer very good
post-sales service. One has to realize that customers look for a product which
is good, and come backed with a good after-sales support package. Once this
aspect is taken care of, selling becomes very easy.

Imports are 30 to 40% cheaper... 

Customers today want quality products at value-for-money prices. These
Chinese and Taiwanese imports are at least 30 to 40% cheaper than the branded
products available in the country. And since there is such a huge price gap,
customers are more inclined towards imported products. These are largely
entry-level items like speakers, woofers and cabinets. Today, there are many
companies in India who sell South-West Asian products under their own brand name
and are making good money. They offer good service facilities as well as
warranty for one year on these products.

Higher margins attract partners...

One reason why resellers are attracted towards having imported products in
their portfolio is the high margins they enjoy from these items. The channel is
in this business to make money and will stock only those goods that will provide
good margins to them. They feel that there is nothing wrong is selling a
product, which can help them make good inroads into the market.

More imports on the way...

I expect more inexpensive imported products to enter into the market and
competition will grow much tougher in years to come. And the customer will
be winner if this happens. Because, if there is stiff competition, prices will
drop. And the customer can then get good products at very low prices. This in
turn will boost business leading to overall market growth.

Wider range available in imports...

One of the positive points about the imported products is that they have
huge range of models in each category. This helps the customer to get the most
aesthetically pleasing product as well as match them in the right combination
with his other devices. Customers are happy if you give them a wide range to
choose from and this is precisely what these Taiwanese or Chinese brand are able
to do. The business prospects in the market for these products can grow if they
are manufactured in India. Most of the companies, who import from other
countries and then brand and sell these products here are now looking at options
of opening a manufacturing plant locally. This will give them a much better cost
advantage as prices will come down even more.

"Increased competition will lead to undercutting and erosion of the very margins, which attracts partners to sell these products" Chander Shekhar CEO, Revika Computronix

Not all imports are reliable... 

It is important to realize that not all products imported from Taiwan and China
are reliable. Some of these do not offer any kind of warranty and after-sales
support. Products which don’t offer any warranty are sold at even cheaper
rates than those of other imports and any reseller buying it is doing so at his
own risk. So partners should make sure they dont get lured by the low prices to
sell these products and then deal with customer complaints.

Liberal government policies lower import prices...

The current government policies are very liberal and lots of taxes have been
removed. This is why inexpensive products can be sourced from Taiwan and China
and sold at much competitive rates in the Indian market. Customers, too, tend to
go for these low-end items as they know that its life-span of these products
categories is not very high. If he can buy it for half the money than a branded
product and also get one-year warranty, then it is a value-for money purchase
for him.

Increased competition will erode margins... 

With more and more products from Taiwan and China entering the Indian
market, there is an increase in the number of partners selling it. There can be
no doubt that these products give better margins to the resellers and once it is
seen that all these products are selling in the market, then the entire reseller
community will be eager to get associated with it. This, in retrospect, will
bode ill for the partners. Because increased competition will lead to
undercutting and therefore erosion of margins. This will be ironical, since
margins are the only reason partners are willing to sell the products.

Price is the only reason imports work... 

The only reason that imported products are gaining an edge over branded
products is that customers are becoming more and more price-sensitive. Once the
customer realizes that all the imported products provide more or less the same
service as any other Indian brand, he rationalizes that there is no reason to
pay more and buy a branded product. The good after-sales support provided by
some local companies importing these products is making life more difficult for
branded products.

Loyal buyers prefer well-known brands... 

It is true that most inexpensive imports have a wide range and this is very
attractive to some customers. But there are other buyers who are very brand
conscious and don’t mind making a few rupees more to get a reputed branded
product which will give them peace of mind, in terms of warranty. Both these
buyers will continue to co-exist and therefore there is enough playing field for
all types and nature of products in the market.