LG and Videocon to stop offering free after sale service for products bought online
To discourage online sales, LG India and Videocon has confirmed that the users who bought products online will not get free after sale service in warranty period. These users will also have to pay for installation and other repair services even if product is in warranty. This rule will be applied to all products including Televisions, refrigerators, Air-conditioners, washing machines and other from these manufactures. Surprisingly, it may not be applicable for smartphone or other mobile device purchased online.
Offline retailers face trouble because of online retailers. Online retailers usually offer products on lesser price. So, customers bargain with offline retailers to sell the product on the price it is available online. This is the big reason why offline retailers are losing customers.
This kind of decisions are not just limited to Videocon or LG. Daikin and Haier are also advising their customers to go for offline purchase. Last year, Lenovo, Toshiba, Nikon and Dell also announced not to offer warranty services to consumers who bought products online from Flipkart, Snapdeal or other online retailers.
Now there is big question. Why do these companies are discouraging online sales? With increasing use of smartphones and internet, most of us will not be agree with these companies. But there is a darker side of the online sale which is forcing companies not to offer free after-sale services.
Online retailers like Flipkart, Snapdeal, Paytm and other offers big discounts. So, online products cost less than the price it is available from offline retailers. Offline retailers have revolted many times that they cannot match the online price. So, consumers have started buying products online. It affected the sales of these offline retailers. But this is not the only problem. They are facing another big problem due to online sales. Consumers buy products online but approach these offline retailers and channel partners for after sale service in case of any problem in product. Due to warranty period, these offline retailers are bound to repair the product and offer after-sale warranty service to these products for free. But in actual, they are not getting any profit from this. They are not getting sales but offering services.
Brands do not have any problem with the online sale. But the major sale comes from offline sellers. So, they cannot leave them facing trouble due to online retailers. Otherwise, these offline retailers will drop the partnership with the brands to offer warranty services. Offline sellers are still responsible for around 95% sales of these brands (Excluding the sales of smartphones in which offline retailers contribute around 80% sales).
LG India is also planning to allow the online sales of its smartphone portfolio online. It has also sent an advisory saying, “not guarantee the originality of products, suitability and updated technology for Indian conditions and authorised after-sales service if they are purchased online.”
Although this new decision is limited to specific brands, but other brands may join this team soon. No brands will leave offline retailers because they offer majority of sales. I will recommend all customers to note this point and think carefully before going for the purchase. Online retailers promise big but there are various cases when customers were denied to offer warranty services. If you are thinking to buy any big electronic product (except smartphone), we recommend you to approach offline retailer. Just because online retailers offer 5-10% discount, you should not put your warranty services at risk.
There should be some kind of limitation in the offers on online retailers. Or, these online retailers should also offer warranty services by themselves to solve the problem of offline retailers.
At the end, only customers will suffer. So, there must be a proper solution of these things. If brand has confirmed not to offer free after sale services, online retailers must add a visible not on their product listing. They should not make false promises to customers.
What do you think about this new decision taken by LG and Videocon? Share your views with us via comments.