Ongoing problems with unauthorised distribution of Kingmax and Pioneer have come to a head with both vendors taking action to clear up their channels. Kingmax has suspended trading with one Australian partner while Pioneer is tackling the grey market head-on with significant price cuts on one of its DVR products.
Memory vendor, Kingmax, suspended its relationship with South African-based Rectron, over a row about parallel importing. This in turn affects its relationship with Melbourne-based Rectron Electronics.
Kingmax sales and marketing manager, Ken Barsley, said Kingmax Australia and Taiwan had suspended Rectron’s authorised reseller status pending further investigation into a significant problem the vendor had noticed with parallel imports in Melbourne.
“We’ve been aware of it for about the past 12 months, but haven’t been able to find the source,” Barsley said.
Kingmax had been tipped off as to the source of the unauthorised imports when a faulty module, sourced from South Africa, was returned under warranty, he said.
Rectron had already received a warning two weeks before the suspension, Barsley said.
While Rectron admitted it did not purchase through Kingmax Australia anymore, sales manager, Susan Chang, insisted that the company had done nothing wrong.
“All Kingmax products that Rectron South Africa and Australia are reselling are officially and legitimately purchasing from Kingmax Taiwan, which is their head office,” Chang said.
If Kingmax Australia felt “left out” by Rectron sourcing product overseas and wouldn’t honour customer warranties, “Rectron will undertake the warranty on behalf of Kingmax in Australia,” she said.
Kingmax had been covering warranties for unauthorised imports, Barsley said. But customers with faulty parallel imports might wait up to six months for replacements.
Locally sourced product had a same day replacement rate.
Kingmax was concerned that the delays could reflect badly upon resellers and its brand name, Barsley said.
He encouraged resellers to purchase through authorised channels.
Meanwhile, Pioneer Electronics Australia has been combatting parallel importing of its DVR-A06 writer by dropping its prices as well as trying to sell the benefits of buying through authorised channels to resellers and end-users.
Pioneer’s marketing manager for multimedia products, Simon Bartlett, said the vendor had taken action after customers complained about unauthorised product which didn’t match a Pioneer advertised product bundle.
The Pioneer advertisement promises Ulead software as well as a blank Maxwell DVD-R and DVD-RW disc, which did not come with the unauthorised product bundle, Bartlett said.
Sydney-based wholesaler, NaSa Multimedia, has been advertising its “independent importer” DVR-A06 bundle on the front page of its website, and offers a customer comparison of what is contained in the authorised bundle.
NaSa manager, Hong Liu, said the company wasn’t misleading Pioneer customers. It advertised a different product bundle.
Customers who had wished to purchase the authorised bundle could get a full refund, he said.
NaSa said dealers were benefiting from price competition which the wholesaler had created.
The product had dropped $200 in price in two months, he said.
Customers had been voting with their feet on the DVR-A06 bundle, Liu said.
“We sell 3000 units a month,” he said. “From our figures they sell 3500 a quarter.”
Pioneer had tackled the grey market problem head on with its “significant price drop” on the product, marketing manager for Pioneer distributor Lan 1, Glenn Jones, said.
The reduction of $30-$40 at the dealer level was an attempt to “drive the grey marketers out of business”, he said.
The vendor was also attempting to clamp down on unauthorised product through education, Jones said.
“The message we’ve been getting out to customers is that there are significant benefits in supporting the channel,” he said.
Pioneer was attempting to give the end-user “a very good experience” by providing everything they needed to use the product out of the box, Jones said.
“Technical support is less of an issue,” he said. “They’re going to support the product, no matter where it came from.”