E-commerce players following predatory pricing, says mobile industry group

Mobile devices industry body ICEA said on Thursday that e-commerce companies accounted for 45-50 per cent of handset sales last month allegedly due to predatory pricing.

"In US, the e-commerce sale of mobile phones is probably 2 per cent. In India this month it has hit 45-50 per cent because pricing is extremely predatory. E-commerce are doing something which they are not supposed to do. That is a big challenge," India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo told reporters while releasing a joint report with McKinsey.

He said that e-commerce is growing very rapidly but if it is at the cost offline retail industry.

"45 thousand retails stores have closed down in the last one year which has created a mayhem. We did a little dipstick in area of Noida. 1,148 stores were there and now there are 950 stores. If you extrapolate this is the kind of stress," Mohindroo said.

E-commerce companies have sold mobile phones with discount of up to 62 per cent during the ongoing festive season. Flipkart and Amazon on Friday started third sale period within a month.

Mohindroo said the India Cellular and Electronics Association members themselves are divided on issue of sale by e-commerce firm but the body is raising this issue for moral and ethical reasons.

"We feel very moral and ethical about it. If political leadership decided that this is the way India has to go forward, they are representatives of the people, then we will take a back seat. At this moment we don't have a clear signal from political leadership, executive, competition commission that what exactly India wants to do," Mohindroo said.

The ICEA-McKinsey report released at the event identified the gaps in way India mobile devices sector achieving global powerhouse status and made recommendations on transforming the resurgent mobile manufacturing eco-system in India.