Grey imports hurt local smartphone player

Cape Town – Unofficial imports are hurting sales of a new Indian phone brand in the country, says a local representative.

Unofficial, grey or parallel imports are typically cheaper than officially licensed products because they are void of aspects such as warranties or free screen repair programmes.

India-based phone maker Karbonn, which in July started targeting consumers in Sub-Saharan Africa with mid-range smartphones, has said grey imports are denting its business in markets like South Africa.

“These parallel importers cost us in excess of 10% of our annual turnover, which, when you consider the size of the cellular market in SA and Sub-Saharan Africa, this equates to a substantial figure,” Daryl Peel, director of Karbonn Sub-Saharan Africa, told Fin24.

“As for many other brands in South Africa, the parallel import challenge is rife for Karbonn branded products. Karbonn Mobiles Sub-Saharan Africa (Making Mobile Pty Ltd), are the only authorised and exclusive distributors of Karbonn branded products in these territories and warns consumers and retailers alike that when buying the unofficial product, that they may not be supported with a manufacturer warranty, and worse still, be buying an end of life product,” the company said.

Marked

According to the Consumer Affairs Committee, while grey imports are legal in South Africa, local shoppers need to be made aware of the risks of buying such products.

“If such information is withheld from consumers, they are misled, which means that the relevant business practice is unfair to consumers,” said the organisation on its website.

Legislation also requires that grey imports are clearly marked so that consumers have necessary protections in the event of a manufacturing failure.

“Our concern is that if something of this nature does happen, that the consumers sitting with unofficial stock will have no recourse. That is a Consumer Protection Act violation,” said Peel.

Karbonn is set to launch a number of dual SIM smartphones and expand its retailer partnership in SA and Peel said that the company is also focused o building its brand locally.

“We have been really happy with the progress we have made with regards to expanding the brands awareness, not only in South Africa, but across the continent as a whole. But as with any brand, there are opportunists that ride on the coattails of these successes and attempt to sell in product brought in unofficially.”

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