GREY area

A con­tro­ver­sial trend is up­set­ting de­vice mak­ers, writes Jen­nifer Dud­ley-nicholson

Herald Sun - Switched On - - Front Page -

Are­tail­ers are slash­ing the cost of gad­gets by do­ing what many of their cus­tomers have threat­ened: buy­ing goods over­seas.

Rather than re­ly­ing on lo­cal dis­trib­u­tors, some re­tail­ers are sav­ing hundreds of dol­lars on each gad­get in deals with in­ter­na­tional firms.

JB Hi-fi has just joined the trend, called grey-mar­ket or di­rect im­port­ing, while chain Game­traders and online store Ko­gan Tech­nolo­gies con­tinue to em­brace over­seas imports.

But the con­tro­ver­sial trend is not go­ing down well with de­vice mak­ers, and even re­tail­ers are warn­ing cus­tomers to en­sure they are cov­ered by lo­cal war­ranties be­fore click­ing the ‘‘ buy’’ but­ton.

It is also caus­ing strange anom­alies where a prod­uct costs hundreds of dol­lars more in a bricks-and-mor­tar store than on its web­site.

JB Hi-fi joined the trend this month, though its grey­mar­ket goods are avail­able only in one sec­tion of its web­site.

Canon and Nikon DSLR cam­eras, lenses and flashes fea­ture in the new sec­tion at sig­nif­i­cant dis­counts. A Canon 600D twin-lens kit is avail­able in the Di­rect Im­port sec­tion of JB Hi-fi’s web­site for $915 — $371 less than on a dif­fer­ent page of the same site.

Di­rect im­port cus­tomers buy di­rectly from JB Hi-fi’s over­seas dis­trib­u­tor, with each or­der ac­cepted only af­ter the dis­trib­u­tor has con­firmed it is avail­able. Cus­tomers who place or­ders over $1000 could be charged GST.

National Re­tail As­so­ci­a­tion ex­ec­u­tive di­rec­tor Gary Black says this sit­u­a­tion is be­ing forced upon Aus­tralia’s tech stores in the ab­sence of a ‘‘ level play­ing field’’.

Black says dis­trib­u­tors of­ten set higher whole­sale prices for Aus­tralian stores and, when com­bined with GST not ap­ply­ing to imports un­der $1000, these stores are dis­ad­van­taged.

‘‘ The Aus­tralian re­tail sec­tor will find it in­creas­ingly dif­fi­cult to com­pete in the face of this highly in­equitable state of af­fairs and it is driv­ing a lot of en­tre­pre­neur­ial prac­tice,’’ Black says.

‘‘ Some re­tail­ers are ac­tively look­ing at es­tab­lish­ing over­seas web­sites or over­seas pro­cess­ing cen­tres where they can of­fer con­sumers the chance to buy di­rectly from over­seas.’’

Aus­tralian re­tailer Ko­gan Tech­nolo­gies be­gan of­fer­ing dis­count grey-mar­ket imports on its web­site in Septem­ber, in­clud­ing Ap­ple and Mo­torola tablets, Sam­sung and HTC smart­phones, and high-end Nikon and Canon cam­eras. The online store of­fers sav­ings of up to $120 on an Ap­ple ipad and $770 on a Canon 5D Mark II cam­era body.

Founder Rus­lan Ko­gan says JB Hi-fi’s move ac­knowl­edges con­sumers are de­mand­ing prices equal to those over­seas. But Ko­gan crit­i­cises JB Hi-fi’s lim­ited grey-mar­ket range, three-week de­liv­ery es­ti­mate and five-day or­der de­lay.

‘‘ They ap­pear to be us­ing Aus­tralian cus­tomers as pawns in their bat­tle with their sup­pli­ers and of­fer­ing prices that they them­selves ad­mit they can’t guar­an­tee,’’ he says. ‘‘ If it was a gen­uine at­tempt to give their cus­tomer what they wanted, then JB would loudly and proudly ad­ver­tise their new di­rect im­port of­fer­ing.’’ Other re­tail­ers are em­brac­ing grey imports for dif­fer­ent rea­sons. Game­traders is us­ing over­seas imports as a way to ac­cess big-name games, save costs and, in some cases, re­ceive games be­fore their lo­cal re­lease.

National mar­ket­ing man­ager Rob Jenk­ins says some game dis­trib­u­tors will not deal with small re­tail­ers, like the 30-store chain, while oth­ers of­fer much cheaper prices to depart­ment stores.

‘‘ There have been in­stances where depart­ment stores are sell­ing a game on day one, like Call of Duty last year, for $2 less than our whole­sale price,’’ Jenk­ins says.

‘‘ With grey imports, peo­ple are still get­ting the same gam­ing ex­pe­ri­ence — we en­sure they’re not go­ing to have any prob­lems — and we’re look­ing af­ter both the cus­tomer and our fran­chisees.’’

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