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FITAG ITAG TIMES fitagtimes@fitag.in Sejal: 9824053863 Dhaval: 9824066111 -Editorial Dear Fitagians, omething very uncommon is happening across India.

A quest for survival has brought all the IT associations across India on a common platform. We have formed Federation 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 initiated against the online shopping 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 deciding all these line of actions. A directive has been issued by

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Vol. 2, Issu No. 4, Page 8

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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 Mkt˼uo FAIITA (Federation of All India 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÷ {xeheÞÕMkLke ¾heËe fhe þfþu.

OEM T1 Channel Partner= Companies National Distributors (ND)/Regional

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Sejal: 9824053863 Dhaval: 9824066111

Round Table with CCI, ICT Associations and other government officials on unfair trade practices of online marketplaces

FIGHT Against Online Social Impact

Strategy at what cost?

Lakhs 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 channel business. Delays in assessing this will lead to unprecedented damage to the SME segment.

Unemployment Member associations claim that the drop in business 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 Money

Mr. Kaushik Pandya Editor

fitagtimes@fitag.in

A 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 concrete evidence to support such an allegation , an investigation 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 strategies are impacting lakhs of livelihood in the country. Flipkart 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- Contined on page-2

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Loss to state revenues 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 Kerala where the government has temporarily banned eCommerce deliveries.

Predatory Pricing The 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 regulations , of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

Role of Brands Most Brands are looking at emarketplaces as another channel for increasing their sales and customer base. No issues. Competition is welcome.

How ever MOP and MRP needs to be maintained and strict and quick action to be taken against channels who are flouting norms. Who will do this ?

Recourse for SMEs CCI, Government of India , Political parties, Trade Bodies , Judiciary are being approached with evidence 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.

jorly due to redatory pricing , marketing and branding , other expenses , in order to capture market share and to become a monopoly of sorts. What is wrong with this strategy? In a free market there is nothing 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 existing 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 rupees. 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 operations by luring their local customers with predatory pricing . India being a price sensitive market , consumers are an easy prey to this strategy and majority of consumers find it attractive to save money on their purchases. This in turn will lead to cartel formation by e-commerce sites who are majorly owned by foreign funds and who in our opin-

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ion have got a back door entry to retail FDI in India.

News papers report -“Samsung, Sony & LG suspend sales to Flipkart; considering legal action for "predatory pricing” . “Publishing houses join hands to stop predatory pricing by Flipkart 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 associations in the country have now decided to intensify their actions to bring awareness amongst governments, Agencies , OEMs , Members, Media and the general public on the dangers of predatory pricing strategy that is being used by e-marketplaces.<

CONTROL PREDATORY PRICING Indian Information Technology (IT) Channels advise global brands to control predatory pricing tactics of electronic marketplaces or face non cooperation from November 24 ,2014.

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 Associations including several state level associations . After detailed discussions on the matters related to predatory pricing , unfair trade practices and the challenges faced by the channel community due to the online marketplaces the following resolutions were passed : The 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 immediate effect.

All OEMs, Brands, National 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 :

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WHY? Predatory Pricing The 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 regulations , of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

Social Impact Millions 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 interest 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.

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Unemployment The drop in business 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.

Loss to state revenues Indian 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 Kerala where the government has temporarily banned eCommerce deliveries.

Role of Brands Most Brands are looking at emarketplaces as another channel for increasing their sales and customer base. Indian Channels welcome competition. 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 channels Competition Commission of India , Government of India , Political parties, Indian and International 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 Money Are the market places being used to launder and generate black money ? We seek an investigation by government agencies to quash this allegation made by a section of people.

Continued from page 1...

Distributors (RD) who Purchase from OEM/Carrying & Forwarding (C&F) Agencies / 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 follow these directive and support the movement. This is in our benefit and for our own survival. Do not look at the short term gains, if you have pressure of holding material kindly approach your local association and take their support to fight against this malpractice of OEMs. Let's wish and pray for the success of this fight against online menace.

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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. Several local and global brands have taken corrective 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 advised 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 online 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 .

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While the channel Associations all over India will continue to do business with such Brands/ OEMs/NDs who comply with the above requirement, the

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entire channel community across India will stop doing business with Brands/ OEMs/ NDs who do not comply with the above guide lines.

FITAG is now on Facebook. Please like Fitag page

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Fitag thanks all member associations to support antipiracy drive & authorize FITAG to deal in this regard in future.

FITAG exe. committee

itag Times reaches to

21,000 retailers / dealers across Gujarat

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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 field

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meeting of the Federation of All India IT associations 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 including several state level associations . After detailed discussions on the matters related to predatory pricing , unfair trade practices and the challenges faced by our members due to online marketplaces the following resolutions were passed : 1. The 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 immediate effect.

2. All OEMs, Brands, National Distributors are hereby advised that they should appreciate the problems being faced by the channel community and take the following compliance action on on before 24 November , 2014 : 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. For example Quick heal, K7Computing, Samsung Mobile and some other brands have taken corrective and preventive action to ensure that online 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 violation of MOP, MRP takes place the OEMs/ Brand / NDs must immediately take corrective action by ensuring that online marketplace / or their partners/sellers are immediately brought to

books . Such seller / online markeplace are 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 Associations 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. he IT Channel partners in India are facing a tremendous challenge as regular customers including blood relatives are questioning the prices at which Channel 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 provides evidence of how using Cash on Delivery (COD) transactions , couriers collect money lower than the Invoice 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 customer 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 create 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 provided with golden goose

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products by BRANDS which will give the Brands as well as the online Marketplaces huge profits . The online market 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 efficient. 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 internet world? Even the internet 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 communication channel with their IT Channels such that these SMEs can reinvent themselves well in time and transform their business instead 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 purchased 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 operating in the market. He ordered the material from the online market place and took delivery . With this evidence he informed his association and said that he will recommend that the Association start a Quit Lenovo Movement 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 disparity 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 approach in countering the predatory tactics of players.

OEMs/Brands / NDs are being approached to ensure that level playing field is maintained. Government departments at the State and Central Level are being approached for their support. A complaint with complete evidence is being filed with the CCI Associations / Federations / Activists / Political parties / Media / Public are being approached and consulted for their support in creating a level playing field and countering the predatory pricing strategies of such players. <

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MkkÞçkhMkVh ËwçkELkwt shk swËqt ËqhËþoLk FLOURISH KNOWLEDGE NETWORKING POWER PROTECTION

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yLkuf ykErzÞk, su çkË÷u ykÃkýe ËwrLkÞk

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 ËwrLkÞk 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 yrLkðkÞo 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 fkuLVhLMkLkk 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 fkuLVhLMkeÍ{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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10th ACMA ICT Show 2014

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