Samsung educates partners on gray market

Amrita Tejasvi

New Delhi



May 8th, 2007

Considering the gray market as a threat to the channel business in the country,

Samsung has begun an initiative to educate partners and cut down the

availability of 'gray products' in the market. It has circulated an educational

letter to 300 partners and 300 systems integrators (SI) across the country to

sensitize them on the issues related to the gray market and discourage them from

indulging in similar activities.

In order to create a positive impact on the partners, the Company has taken the

support of industry organizations like Manufacturers Association of Information

Technology (MAIT) and Progressive Channels Association of Information Technology

(PCAIT).

Reacting to the initiative, members of the industry organizations felt that it

was a positive move towards controlling the 'gray' business. "I feel that

Samsung has made the right move in alerting partners on the gray market. This

would benefit not only the Company but the Industry as a whole," said

Vinnie Mehta, Executive Director, MAIT.

The main objective for Samsung, according to PCAIT, was to increase sales of

original Samsung products as also to inform partners about the disadvantages of

buying products from the gray market since they would get no warranty or

after-sales service on them. As part of the initiative, Samsung would also

create awareness about the legal issues arising out of this activity and educate

the partners about the same.

Another interesting observation made by the PCAIT was that many partners

preferred the term 'parallel imports' to 'gray market' since they pay all the

required custom duties even for such products. "This is an interesting

observation and we are planning to inform the Company about it," said Saket

Kapur, Secretary, PCAIT.