Split over parallel importing fears

Split over parallel importing fears

Low margins on PC components could make them the next target for parallel importers, according to various sources across the channel.

Motherboard manufacturer, Abit, recently announced the addition of holographic stickers to denote genuine parts shipping to the UK market in light of European channel concerns. The move has sparked debate in Australia as to whether companies will follow suit in the region - typically 12 to 18 months behind the European and US markets.

"I haven't heard anything like that in the motherboard market yet - but it wouldn't surprise me," Plus Corporation managing director, Nigel Fernandes, said.

"With resellers making a dollar per board, if they can make 10 they'll give it a go.

"Low margins could lead to parallel importing of components - at the moment it hasn't surfaced."

Acer marketing director, Raymond Vardanega, said high-value components would be on the shopping list for grey-market dealers.

"CPUs or hard drives could have a problem - they are highly-tradable, commoditised components," he said.

If people could get away with it, they would, Protac marketing manager, Patrick Cheng, claimed.

He said the situation was also more serious with high-value products such as flash drives.

"They are high value items with no serial numbers," he said.

Although Australia's proximity to Asia would make importing easier, the country's traditionally closed market made grey imports less of a problem, Gartner principal analyst, Andy Woo, said.

"Logistically, Australia is pretty isolated compared to the 'open market' of Europe," he said.

"Tier-one distributors, such as Ingram and Tech Pacific, work so closely with manufacturers there is little room for movement.

"You can never get rid of grey market items completely, but would resellers want to jeopardise corporate customer satisfaction through lack of warranty or service on grey parts? It may happen in the home of DIY user space, but further up the food chain it's not worth it," he said.

A 2003 report by KPMG and the Grey Market Alliance estimated IT manufacturers were losing $US5 billion annually through parallel importing. Although formal programs are put in place to control distribution, a wide variety of abuses take place.

According to the report, few OEMs have addressed corporate codes of conduct focused on combating losses resulting from grey market dealers.

It also stated that 67 per cent of IT-related items being purchased on the grey market comprised of hard drives, memory and controllers.

Printer cartridges - a traditional market for parallel importation - accounted for just six per cent.

Epson Australia's director of marketing communications, Mike Pleasants, said printer manufacturers in Australia had fought hard to stabilise their market over the last three years in the face of counterfeit and grey-market products.

"Counterfeiting was getting so good the only way we could work out whether cartridges were genuine or not was to get the ink analysed," he said. "To help the process we introduced holograms on our products and a Gold Seal Distributor program.

"However, anything small and easily transferable is a target. Australia's proximity to the Asian market doesn't help - transit time is a lot faster here than to Europe, making importing easier."

In 2003 Epson found itself having to cut ties with a distributor after the discovery of grey market goods in its warehouse.

"We have got it much more under control now," Pleasants said. "As soon as our dealers are offered product at a lower price they let us know. It sticks out like a sore thumb."

Lexmark national sales and marketing manager, Scott Millington, said his company also fought hard for control.

"Controlling the grey market is about pricing versus currency exchange," he said. "We still change prices regularly to maintain global price parity. We are actually going to have a price rise on toner on October 1 to keep the market stable."

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