Tamil Nadu traders boycott Vivo over lower margins, unfair trade practices

A section of mobile phone retailers and distributors outside Chennai, in Tamil Nadu, are boycotting Chinese mobile phone brand Vivo alleging that the company has reduced the margins and engaging in other unfair trade practices. The protest comes at a time the company has launched a new smartphone V9.

The Tamil Nadu Consumer Products Distributors Association (TNCPDA), which has boycotted V9, launched on March 23 in India, is also gathering support from the traders in neighbouring states of Karnataka, Kerala, Telangana, Andhra Pradesh and the Union Territory Puducherry. The organisation has invited traders from these states to join the protest meet they organise in Chennai on Saturday.

An email sent to Vivo seeking its take on the allegations did not elicit a response.

The traders alleged that the Fangs Technology management has been following wrong trade practices from 2017, affecting the gross income of distributors, by reducing the commission to four per cent from six per cent. The monthly turnover of Vivo from Tamil Nadu market is around Rs 1 billion, they say.

"We have temporarily deferred purchase of Vivo phones for distribution from last month, especially from the time of launch of V9. We have also requested the modern trade not to sell V9 till the company settles the issues. We are going to strengthen our protest from the meeting on April 7," said PM Ganeshram, founder and state President of TNCPDA, an affiliate of All India Distributors Association.

TNCPDA has conducted a meeting with the Vivo distributors in Tamil Nadu and passed a resolution, demanding the company to reverse the reduced margin from four per cent to six per cent. The protest has affected the V9 sales in the state, he claimed.

It has also sought the company to enter into a five-year agreement with the distributors with smooth separation policy of 120 days' notice period. The existing practice is that the companies terminate the distributors without adequate prior notice.

The distributors, who may have issued the credit to the retailer for the products he supplied, may end up without even manpower to collect the money from the retailers. While the Association is starting the protest with Vivo, it would look at other brands also later, he said. The TNCPDA has formed a group under the name Tamil Nadu Mobile Retailers & Distributors Association to take up the issues related to mobile phone trade.

They have also sought Vivo to settle all rents, branding incentives amounting to the tune of around Rs 2 billion, to the mobile phone retailers.