COMMENT: Choice Bangs On About Cheap Pricing But Fail To Identify The Risks Associated With Cheap CE Pricing.
Choice who are constantly looking for publicity to spruik subscriptions to their publication is now claiming that Australians pay an average of 50 per cent more for PC games, 34 per cent more for software, 52 per cent more for iTunes music and 41 per cent more for computer hardware than the US. Several of the comparisons were made based on Harvey Norman pricing Vs overseas web sites.
According to Gary Munitz, managing director of data analytics firm Invigor Group and creator of price comparison site ShoppingNinja, big retailers are facing a serious problem unless they can become more price-competitive.
news.com.au claims that ‘consumers are turning to VPN services in droves to navigate around geoblocks, online stores are increasingly importing products through the back door and reselling them at significantly cheaper prices than traditional bricks-and-mortar retailers such as Harvey Norman’.
ShoppingNinja now attracts more than 50,000 users a month and Mr Munitz says the majority of its sales are being funnelled to grey importers, with the mobile phones, cameras, tablets and headphones the most popular categories.
ShoppingNinja collects a commission on all sales made via the platform. It’s aiming for $3 million in revenue in the first 12 months, and expects that to increase to $20 million over the following two years.
The average discount is 20 to 30 per cent, with phones generally at the higher end. Other comparisons are even more stark. A Nikon Coolpix P610 digital camera is $384 from grey importer CameraSky, compared with $599 at Harvey Norman – more than 55 per cent more expensive.
“It’s more to do with old-world commercial models,” said Mr Munitz, a highly regarded tech entrepreneur who founded Global Group and helped develop platforms including Menulog and Get Price.
“Across every product category now there are a significant number of grey importers that sell online, and as consumer behaviour increasingly shifts online, this is going to be a big problem for Australian bricks-and-mortar retailers.”
Mr Munitz said the likes of Harvey Norman were still operating on business models put in place decades ago. “Sony would say, okay, [Australia] has a population of 20 million, this is what our profit needs to be. But the internet has bridged the gap.
Choice spokesman Tom Godfrey said local providers had been holding up prices for so long, that frustrated Australian consumers were finally taking things into their own hands”.
What Godfrey has failed to communicate on behalf of Choice is that retailers such as Harvey Norman, JB Hi Fi and Dick Smith are actually employing tens of thousands of Australians who expect to be paid each week.
They also have operating costs such as rent and warehousing and for Choice to single out Australian retailer pricing Vs online retailers who are selling products that often have no warranty in Australia or have been manufactured in questionable factories that don’t necessarily comply with Australian manufacturing regulations especially electrical goods raises questions as to whether Choice actual care about Australian consumers or whether they are isolating issues to create publicity for themselves like they did with their recent Samsung washing machine stunt.
Mr Godfrey said local companies needed to start competing on price. “If they haven’t realised by now then they’re a bit late to the party,” he said.
Maybe Mr Godfrey and the team at Choice, should pay a visit to the family of Sheryl Aldeguer who left behind two young children and a husband when she was electrocuted by a cheap faulty USB phone charger.
Authorities used Ms Aldeguer’s death to warn consumers against buying cheap USB chargers from online stores.