Dark Days For Mobile Grey Market

[Honest 836]

Dark days for mobile grey market

NEW DELHI: The organised mobile retail sector is fast clamping down the grey market for mobile handsets. According to Indian Cellular Association (ICA), the share of the grey mobile handset market came down from 60% in 2006 to just 10% in 2007.

“The share of the grey market has come down considerably due to various factors, the most important being the reduction in duties. Many enforcement measures have been taken over the years to check the mobile handset grey market,” said ICA national president Pankaj Mahindroo.

The import duty on mobile phones has been reduced from about 16% to around 4%. Industry participants also believe that the shift from grey market to the legal market is by and large on the account of growing number of mobile retail stores.

“The mobile stores provide accessibility to the consumers. Our mobile stores are at all the visible locations, so consumers can walk in anywhere and get the best deals possible,” said Subhiksha marketing vice-president Mohit Khattar.

Industry analysts say that a huge grey market exists because of the differential of around 10% to 25% between legal and grey handset prices.

With growing competition in the organised mobile retail market, players are offering products at lower prices. This, in turn, helps counter the grey market and bolsters footfalls in these stores.

“Consumers can buy high-end, genuine branded handsets with guarantee of replacement or repair through the mobile retail stores. Trust is the predominant factor that consumers are turning towards the branded retail stores,” said HotSpot CEO Sanjeev Mahajan.

Consumers are opting for accessibility and do not mind paying extra for it. The grey markets operate from a few areas in a city. On the other hand, mobile stores are more easily accessible as they are located in all prominent markets.

The growing brand consciousness among the people, analysts say is also propelling the consumers to approach branded mobile retail stores. Mobile phone retail chains like Mobile Store, Mobi Retail, RPG Cellucom, currently account for just 7% of the overall mobile handset market, which has a market share of Rs 15,000 crore.

“Currently, the impact of mobile retail stores on the grey market is minimal. However, considering the rapid growth rate of organised mobile retail, its contribution is set to increase in the next 3-4 years,” said retail consultancy Technopak Advisors chairman Arvind Singhal.

Though the grey market in mobile phones has reduced, a large (75%) grey market still exists in mobile phone accessories such as batteries and chargers, which are often available at one-tenth the price of company branded accessories. Last year, the mobile phone makers asked finance ministry to reduce 34% duty on imported accessories, but nothing concrete has happened as yet.

[Greatest 55]

but still... grey market will be grey market... our friends in the grey market must have found other loopholes in the system!!

[@mitJ@in 256]

Now a days, Users are also awared pros and cons of Duplicate and Geniune Accessories, People also buy Genuine Orignal Accessories now.

[kshah 452]

Gray market is surely more than what these guys claim. I have seen bubbling gray market in Ahmedabad (About 25-30 shops) crowded day in an d day out.

These guys charge hefty premium for little premium phone.

[vmsanghrajka 0]

Grey Market market share has considerably reduced.. I mean getting phone with bill and warranty is a better option... Also, u can claim against your expenses in ur annual tax filling

[Honest 836]

^^^

Very correct my dear Vaibhav. Actually now a days educated people choose to buy the product with bill. Thats best, as they get warranty on their products too.

Regards.