When shades of grey go bad

There is still confusion in the South African market when it comes to grey imports.

June 21, 2013

If the price seems too good to be true, it probably is

There is still confusion in the South African market when it comes to grey imports. Craige Fleischer, Director of Mobile Communications at Samsung Electronics SA, believes this need not be the case as the best (and safest) option available to consumers is to buy their products through authorised local channels.

“Over the past few years, the grey market has become increasingly problematic; in part because of the growth of online stores offering products from international markets at a discounted rate. Yet, it raises the very real issue of ‘buyer beware’ as consumers do not understand the negative impact these items can have on the product and overall brand experience when they go this route,” says Fleischer.

In some instances the consumer receives a financial benefit from purchasing devices through unofficial channels, instead of the recommended Brand Experience Stores or approved retail and online outlets. “If the price seems too good to be true, it probably is. Yes, grey imports are often a little cheaper than purchasing products via approved vendors, but they do not offer nearly the same number of advantages to the local customer.”

There are two categories of grey products. Firstly, you get those that are genuine products but are imported without the legal sanction of the manufacturer or their authorised distributor. And secondly, there are those products that are not genuine or fake, but are branded as the real thing. This creates a negative brand experience as the quality of the product is not comparable to the real product. Ultimately, it is in the consumer experience of the product that the impact of buying grey products is more keenly felt.

“Authorised products purchased through approved channels benefit from all the advantages of the local eco-system of the manufacturer. Think about all the latest software upgrades that are optimised for our mobile networks. Grey devices simply do not work as they should on cellular networks,” adds Fleischer.

Grey devices are also not able to run local mobile apps as the default store will always be set to the country from which the device originates. This means that when a customer wants to buy an app, the South African credit card will not be accepted as a method of payment, as the device is configured for a different market.

This extends to the partnerships agreements which companies like Samsung have put in place in South Africa. For example, with AlwaysOn customers receive 1GB of free AlwaysOn Wi-Fi data every month for 12 months, per eligible Samsung device that they own and which were purchased through approved outlets. Value-added services such as Accidental Damage from Handling (ADH) comes standard with the GALAXY S4 and offers two screen and liquid damage repairs to the device, at no extra charge. The ADH is incorporated in the existing 24-month local warranty on the GALAXY S4. Grey products will not be able to benefit from any of these local value-added offerings.

Then, probably causing the most frustration to customers is when the grey device experiences a product failure or requires warranty support. Warranties are void when presenting a grey import to a service centre and currently it is within the store owner’s discretion to offer support on these devices. With items bought through the authorised channel customers can receive assistance from a number of Samsung service centres across the country. Just think of what would happen if you need to send your device back to the country where you purchased it from for support. The impact on your daily life whether it be business or personal will be significant as it will take weeks to get any response and effective support if you do manage to get any,” concludes Fleischer.

“Then there is also the economic impact on the South African market. Not only could purchasing grey imports impact the local price, but it can lead to potential job losses as well. Investment is done by organisations like Samsung in building a local support infrastructure and distribution network for their products only for the grey market to come and sidestep it.” Fleischer says that at its core, buying grey imported goods is not the actions of socially responsible citizens of the country.