You’ve heard of the black market, a place where you buy things that are illegal to sell such as babies, human kidneys, drugs, automatic weapons, etc., but have you heard of the grey market? It’s fairly huge, and you’ve probably purchased something from the grey market without even knowing. All of you in America who ordered a Nokia that was not available in the USA, and received a package that had a charger that only fits in those hideous UK power sockets, have successfully purchased something from the grey market. Companies do this to control prices and inventory in specific territories. I doubt Nokia Finland would be very happy if a bunch of those $285 E75s from Nokia USA snuck into the local market, considering that device is €435 ($625) over here. Nokia split up China into different regions to do the exact same thing I just described. It makes sense since some parts of China, like Shanghi, are filled with people who probably make more than you and me, while other parts are filled with factory workers making toys with lead who earn almost nothing. Prices are adjusted accordingly, but when distributors violate their territories, they get a fine. Representatives from these distributors joined up and wrote three letters that were sent to State Administration of Taxation (SAT), the State Administration For Industry and Commerce (SAIC) and the National Development and Reform Commission (NDRC). In it they claim Nokia holds a monopoly on prices, doesn’t pay taxes, doesn’t give evidence when assigning fines and violates consumers’ rights in China. If Nokia doesn’t solve their problems, they’ve threatened a boycott, as in no more Nokia phones to be sold to one of the fastest growing markets in the world. You bet a team of lawyers just left Helsinki-Vantaa airport 5 minutes ago.
[Image above from Flickr user ziff_tang of the Nokia office in Beijing, China]