IT dealers have been suffering for past 6 years, for the reason that introduction of ECommerce technologies has changed market dynamics and consumer behavior, which the ever opportunistic IT vendors have exploited with full strength using the E-Commerce platform. Brands & OEMs initially engaged with few channel partners and had started routing the material through them to online portals, but subsequently these ecommerce portals started
their own offshoot concerns. Brands, gradually overlooking & ignoring the ND by totally disrespecting the distribution ecosystem and grossly bye-passing the T2/T3 Channels, started direct billing to these offshoot concerns of the online portals. IT channel community tried to resist on their own including State Associations and FAIITA, but only limited success was achieved.
Covid19 conditions further compelled the buying behavior to prefer and switch to online buying which was naturally suiting the online operators or digitally enabled businesses due to various restrictions brought in by the Government from time to time.
CHALLENGE: With aggressive marketing and predatory pricing, online portals have already eaten market share of almost 30 % and are still growing even though the restrictions due to Covid19 are prevailing. In this changed scenario, FAIITA has undertaken challenge to reverse this trend through various initiatives and creating a hybrid model of business for IT Shops and B&M partners. FAIITA has deliberated thoroughly to understand the strengths and weakness of IT dealers and has decided to draw strategy using two most important strength of channel, i.e
geo positioning across India and huge level of inventories in which channel invests. Biggest challenge comes from Predatory pricing which is supported by very big financial strength & huge capital availability with these online portals. Therefore to encounter this challenge hybrid model enabled with dynamic pricing support has to play a much bigger role. FAIITA through its initiatives shall be addressing all above challenges and suggest counter measures to be taken accordingly. Further, the factors preparing favorable conditions for benefits to ecommerce
portals, such as cashbacks, EMI, Bundling Freebies available on ecommerce platforms, are to be handled. IT dealers also remain under threat of getting disabled just because of being present on E-Commerce platforms, whereas most of brands have prohibited the online sales by IT dealers, only dealers who have specific authorizations can have presence on e-commerce portals. Brand enabled price parity in case of dynamic pricing implementation will need high degree of technical expertise and close working from FAIITA with brands.
TAKING CHALLENGES HEAD ON: To counter these challenges, FAIITA proposes to extend the formal Brick & Mortar as well as IT Business to hybrid model with a mix of 8 hours conventional working coupled with 24 hours digital working. Two-pronged strategy of FAIITA to make channel hybrid, is focused to resolve all the challenges and bring back a profitable business model for the entire IT channel. One part which has now been enabled now is E-Store which will primarily empower each store in to a digitally enabled platform as a minimal affordable cost. This enablement will create atmosphere where IT stores will have a digital presence which can be seamlessly connected to second initiative which is B2C platform. Creation of Master Catalog covering lacs of SKUs for E-Shop with proper Brand/OEM authorizations and their active participation, is the most important tool being made available to
a dealer for out of the box usage. FAIITA will also ensure that catalogue prepared for each shop be extended in B2C platform with dynamic pricing benefits and in long run same dynamic pricing be made available in reverse i.e E-Shops. FAIITA B2C portal shall enable members for a greater customer reach at their E-store. FAIITA shall empower each of its E-Store & work out with vendor authorization allowing the E-Stores participation in FAIITA B2C platform without any legal strings attached. FAIITA platforms shall use its collective power & strength by assessing cumulative volume of the Partners for ensuring Cash Back benefits and other finance options so that IT dealers are at par and are able to compete with any other E-Commerce platform.
SPECIAL FEATURES FOR FAIITA AND ITS ADVANTAGES:
1.Whereas on any E-Commerce platform cost of transaction varies from 7% to 15% depending on product. Cost at FAIITA portal shall be merely 1.5% to 2% depending on payment process adopted, which is merely the payment gateway charges whereas, FAIITA being a welfare organization, shall work without earning any profit.
2. Delivery time for each order on FAIITA platform shall be smartly reduced to 5-6 hrs in comparison with 2 to 3 days by any other portal. This will happen because of geo positioning advantage of each and every E-Store of dealer.
3. Realtime price approvals in case of dynamic pricing approvals to avoid any loss to any dealer.
4. Marketing on shared cost basis for portal, making is viable proposition, Cumulative advertisement can drastically reduce the cost burden.
5. FAIITA will ensure that all its E-Stores be recognized by brands so that benefits from brands are passed on to them in smooth manner.
6. FAIITA shall provide ‘FAIITA Enabled E-Store’ Certificate/Placard/Display, co-branded with the District/State Association Logo, to be shown at prominent place of each E-Store to develop sense of belongingness and better customer trust.