Impact of gray market on electronic processing market

Some time ago the semiconductor company Xilinx sued Flextronics processors, Flextronics  raised the commodity prices of the Xilinx  semiconductor and sold them to another electronic processors and obtained a certain profit in the absence of Xilinx licensing. This is clearly the gray market we have often heard, which refers to the market channels that sell the branded goods without the authorization of the trademark owner. The gray market goods are genuine goods with brand, but the sales channel of them are "informal" channels without the trademark owner's authorization and consent.

In fact, the gray market has caused some impact on our normal electronic trading market. Brand Company has been affected, so many small brands under the gray transaction processors will only become more rampant.  As many electronics manufacturers  defects in the technical and equipment, looking for the reliable OEM or EMS electronic processors has became their most convenient and direct production path. These OEM or EMS electronic processors in the production of electronic components and so have some of the production of excess inventory, they can not withstand the temptation of gray market sales.

Impact of gray market on electronic processing market

1.The impact on the sale of original brand supplier

When many electronic processors have other more convenient and more favorable purchase channels to obtain the required production material, they will not find the original supplier, causing their decline in sales and material backlog.At the same time, it will also cause the loss of the potential market of the original brand suppliers, if not controlled, there will be more companies to drill the gap in the market.

2. The impact on the original brand image and intellectual property rights

Gray market sales will make the original brand supplier's brand image damage, cost difference or the difference between the price of same product is easy to make the person who is not clear have bad impression about the product. The original brand supplier's intellectual property rights can not be protected.

3. Can't create a good and fair trading environment

Market transactions must be based on the basic moral norms and the highest laws and regulations, if the gray market transactions more prevalent, then the fair trade environment we have been pursuing all the time will be destroyed by our own. 

We should ensure that the quality of the production of products, adhere to the rules of market transactions, thereby improving customer satisfaction. And to enhance their own quality, and enhance the protection of intellectual property rights.

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