Earlier this month the LG Nexus 5 went on sale In India and we were very excited to see a quick launch! However we were surprised to see that the Nexus 5 is priced higher at offline stores than Google’s own Play Store. While it is a well-known fact that Google prefers anything that is online, we are sad to see that offline vendors are deliberately being put on the backfoot by providing them products at a higher cost.
Fact remains, In India most of Nexus 5 sales would come offline! Here is what a source had to tell us about this:
Well, I don’t think this is LG’s decision. Nexus is actually Google’s brand & phone & this decision has been made by them. LG has just contributed in the hardware and having the advantage of using the Nexus brand name 🙂 Thus, I feel Google wants to control everything in the process. Their focus is on getting more customers online and NOT promoting offline sales. And ultimately, they can always use the excuse “we are able to sell it cheaper by not having any retail overheads”.
What is most shocking is that due to the crazy demand & scarcity, people don’t mind spending Rs 1000 more to get what they want. This completely belies all theory that the Indian customer is price conscious. Indian customer is willing to pay any price as long as he gets what he wants & when he wants it! Though it is sad to see consumers being made to pay this premium just because they love to shop offline.
One more factor is that, mobile retailers are used to pathetically low margins! To ensure there is no undercutting on margins & the price, both Google and LG decided not to give more margins on the Nexus. Thus if a retailer sells at Google’s online price, most likely he is either selling at his cost or at a loss.
Update: We just learnt that you don’t get the headset if you buy the Nexus 5 online!
Update 2: We were mistaken, both online and offline versions of Nexus 5 ship with the headset, original report stays true.