Ritchie Street partners join hands to curb undercutting business racket

Following the Narbhavi Infotech case, the market is expecting a major shake up in business with many small-time resellers
involved in the undercutting business racket expected to come to light. A couple of weeks ago, Narbhavi
Infotech had closed shop owing over Rs 40 lakh to the market, its proprietor KV Satish having absconded. Meanwhile, a team of high profile
resellers in the Ritchie Street market are meeting together regularly to evolve a
strategy to control this undercutting business racket and finding out the possibilities to take legal actions against them. "We are seriously working
on it and we hope to find some solution for this dreaded business practice," said a leading reseller based out of Ritchie Street market, who is one of
the key drivers of this initiative.

According to market sources, there are many small-time resellers outside Ritchie Street market who source products from
them (Ritchie market) and in turn, again sell the same products to undercutting business racket operators
at Ritchie Street for a very low price. Over a period of time, their outstanding increases and finally they close the shop leaving the suppliers
in a lurch. "Narbhavi Infotech was one of those companies who bought from us and sold it back to the Ritchie Street market
(undercutting business racket), before cheating us for several lakh," said another leading
reseller, who is an affected party in the Narbhavi case. "Now, we have found out that Asph Infotech in Ashok Nagar, Chennai, is also involved in this
racket and have collected enough evidence to take action against its proprietor
Rajan. For the last few days, Asph Infotech has not opened its office as it owes some money to the market," he added. 

Meanwhile, the team of high profile resellers has identified some names in Ritchie Street as the main buyers (entertainers) of
such undercutting products. Suyog Computers, Prakash Electronics & Computers and Suraj
Computers are some of the names. "We have few more names including a key reseller in Ritchie Street who are part of this undercutting business
racket.

We are just waiting to collect more proofs to reveal those names," said a representative of the team. 

"The market needs a major clean up to remove the bad players and they are not only killing genuine players like us, but killing
themselves and many others in the business," said a leading sub-distributor in Ritchie Street
market. "We are taking legal consultation to file a police complaint and we want to curb this menace at any cost," said another sub-distributor in the
market.

Meanwhile, a key reseller representing the local IT association ITTA questioned the genuineness of MNC vendors who cry
about undercutting business practices. "It is the MNC brands who spoiled the market in the name
of schemes and targets. They do not maintain an uniform pricing policy even among their star partners and they are ready to promote competition at
any level giving discounts purely based on numbers and not on reseller relationships, values and commitment. Today, I can
point out almost all leading MNC brands are involved in this business practice."

When contacted director of Prakash Electronics & Computers Ajit Jain said,
"Who is not involved in this trade practice? And I can also reveal so many names in the market who are part of this game. I am not selling above
MRP, if any, to penalize or take action against me. I am able to source products
at a very low price and I am giving it for a competitive price. I have bills

for all transactions made and I can face any challenges. I am doing this business for the last five years and it is purely at my
discretion to sell products at any rate." Adding to this, his brother Madan Jain said, "We are
not cheating anybody in the market and we do not have any payment issues. 

So, why should they crib about us? Even, we know the ethics and fair trade practices."
Said Pankaj of Suyog Computers, "We get good offer price for products and weÂ
buy them paying in full cash. We are also buying from several distributors and we maintain proof for all our transactions. The vendors are relentlessly
promoting schemes which make some of the resellers to buy stocks in huge quantity to achieve targets, who in turn sell to us."

Ashok of Suraj Computers clarified that he is not doing any business from Chennai and he has just an office in Chennai to
import the products and forward them to Bangalore, where he is running a shop. Meanwhile, the market
is expecting few more fly-by-night cases to come to light in the following weeks.

S Gopikrishna

Chennai - CyberMedia News