Oppo India is reorganising its channel management to sell its smartphones directly to local distributors, bypassing the Chinese layer that the company had established since its inception, as per media reports.
The development coincides with increased government scrutiny of Chinese handset manufacturers such as Oppo.
Oppo for distributing their products through Chinese partners. India has been pushing Chinese handset manufacturers to use only local distributors. However, India’s fifth largest smartphone brand has stated that it is eliminating the Chinese distribution layer in order to reduce operating costs and improve logistics efficiency.
So far, Oppo’s channel sales have been routed through a four-layer system. Oppo India headquarters bills the state distributors, who in turn bill the local distributors, who then forward the stock to retailers, who in turn bill consumers.
Oppo said in response to a letter from the All India Mobile Retailers Association(AIMRA) that it will begin testing the new channel outreach in Delhi from 1 January.
According to media reports, the AIMRA letter to Oppo dated 30 December, 2022, stated that beginning 1 January, 2022, “Chinese state agents” from the smartphone brand will be relocated out of India, and Oppo India will bill distributors directly. According to the retailers’ association, this is causing retailers to be confused and anxious about who will be responsible for claiming GST credit notes, promotions, and TDS compliance.
Oppo India, along with other Chinese smartphone brands, has been subjected to multiple raids by the income tax department, the Directorate of Revenue Intelligence, and other government agencies for alleged tax evasion, despite ongoing India-China border tensions since 2020. Previously, the company denied any wrongdoing.
Oppo stated in its response to AIMRA’s letter that SDB (state distributors) are one of Oppo India’s most important channel partners. “However, with “channel challenge increasing,” the company is looking to reduce operating costs and improve warehousing and logistics efficiency.
We will test the new logistic mode in Delhi and directly supply distributors; SDBs will assist Oppo India in sales management matters, and their responsibilities will not change, according to the letter.
