Nokia's distributors in China are growing angrier at the Finnish phone giant as 280 distributors from 15 provinces gathered at Beijing in protest, and appeal to the government.
According to the representatives of the Chinese retailers, Nokia is being sued for price fixing, tax evasion and violating consumers' rights, the Beijing Morning reporter. This is the third time that Chinese retailers denounced Nokia.
Letters have been submitted to three government organizations, including the State Tax Administration, the State Administration for Industry & Commerce and the National Development and Reform Committee.
The retailers team even made inviting phone calls to overseas media saying that Nokia has unlawful acts in its managing process which should be reported publicly.
Mr. Dong, a distributor representative in Ji'nan, is responsible for contacting media. He said that they have sent Nokia lawyer's letter but got no response which drove them to the next move.
This is the third joint boycott against Nokia and the scale is expanding over time. The first and second boycott was held in Changsha and Zhengzhou, but Nokia refused to give in.
According to the letter to National Development and Reform Committee, retailers sued Nokia over its fulfillment distributor model, saying that it severely restricted the price of retailers, which is against the anti-trust law.
The letter to the State Administration for Industry & Commerce gave the example of Nokia's monopoly agreements.
According to Nokia's sales channel policy, Nokia assigns sales targets to its six global regions every six months, and the China office then assigns its target to its channels.
The distributors must meet the target no matter how much it is, according to Caibo Hu, general manager of Jiangxi Changhong Communications Equipment Co Ltd.
However, to manage the channels, Nokia enforces a strict regional sales policy. A distributor who declined to be named from Hunan Province said he is forbidden to sell Changsha county's Nokia products in Xiangtan county, even if the two counties are only 40 kilometers apart.
And if a single cell phone is sold outside of a distributor's assigned sales area, Nokia will fine him 10,000 yuan ($1,460) for each one, the distributor said.
Distributors can only receive their commissions if they meet their targets within their regions, but the problem they face is that they can only meet their quotas by selling outside their assigned sales areas, said Hu.
Retailers also accused Nokia of not providing replacement for cross-territory products to consumers, which harmed their rights. The retailers ask the industrial and commercial administrative department to conduct anti-trust investigation over Nokia as well as putting on record to investigate Nokia's market dominant position.
Fulfillment distributor model is Nokia's paradise for tax evasion, retailers told State Administration of Taxation. They noted that the revenue of Nokia's fine over cross-territory products should be reported to tax authorities and should be charged for business income tax.
Wang Zhijiang, the representative of retailers, said in an urgent report that all of the Nokia's distributors will go to Finland's Embassy in Beijing to protest Nokia in August.
We want Nokia to cancel and turn back the fines, and promise that the same product will enjoy the same services across China. They must also promise no illegal things will happen, Dong said.
However, if no agreements is reached, we will sue Nokia, Dong said. He said the retailers in his province have pressed their thumbprints in an agreements to sue Nokia.
Dong said they may also reject to sell Nokia's handsets to protest it.
On June 10, 40 dealers in the Communications Market in Ji'nan, Shandong Province, hung a red banner saying Boycott Nokia in front of the mall, the fifth largest cell phone wholesale and retail market in China.
Some Nokia distributors in Shanghai have also shifted to other brands, and dealers in Hangzhou, Zhejiang Province have also reportedly joined the protest, according to ChinaDaily.
On July 24, retailers gathered in Zhengzhou and decided to sue Nokia.