Price comparison websites are a relatively new phenomenon in Iran.
Many sites have been launched in recent years, which collate offers made by retailers for similar products, but with little success. The reason for this lack of traction is not very clear, though the distrust of customers toward merchants could be the most apparent cause.
Earlier this year, Financial Tribune interviewed an online merchant about his experiences with the local price comparison websites. In that interview, the owner of the business stressed that he was hesitant to use price comparison websites due to their dubious pricing mechanisms.
Price comparison sites are meant to increase competitiveness and benefit consumers.
Hadi Zomorrodi, the owner, stated, “Retailers often quote low prices, which they are unable to offer in practice. This puts off consumers from retailers who actually offer better prices like us.”
The largest local price comparison site is called emalls.ir, which currently ranks 197th in Iran, according to Alexa.com, an analytical website service.
A relatively unknown price comparison player, emalls.ir has steadily crept up the rankings by displaying prices from dozens of retailers. Like their international competitors, Emalls.ir, Gheymatyab.ir and Torob.ir have attempted to raise the bar in favor of the consumer with price guides and user ratings. What these sites cannot do, however, is check the authenticity of prices. That is where the sector's credibility takes a hit.
There are certain stores like those run in Iran's Kurdish-speaking city of Baneh, which offer low prices, often 30-40% cheaper than those of the official retailers.
Take one of the best-selling cellphones, the Samsung Galaxy S6, the price of which ranges from the upper end of 21,200,000 rials to the lowest 16,250,000. That is a $147 difference, something consumers cannot easily ignore.
So initially, the websites lead the buyer to the cheapest option. However, reviews of certain companies, along with ground research, show that the lower-end retailers either do not stock the phone or hike the price by the time you get to the shop or by the time it gets to one's door.
Such fraudulent pricing strategies will deter potential bargain hunters, but the sector is not struggling with these potentially life-threatening concerns. The more pressing issue concerns accountability.
Transparency Website
The basis of these websites' success is their transparency and reliability, as users quickly realize if that's not the case.
In a quick comparison of Torob.ir and Emalls.ir, one finds that the price for the Samsung Galaxy S6, for instance, differs. The understanding is if a price comparison website is doing its job properly, then all sites, or at least the major sites, should list the same prices for the same product from the same retailers.
For example, some websites only appear on one of the sites; this is likely because they are hesitant to give their pricelists to competitors.
At times, customers are sent to a certain website repeatedly, which reveals a vested interest. The site may have been set up by one of the companies listed as a way to skew results in one's favor.
Nevertheless, one of the laws of cyberspace is that deception leads to disaster. You can't fool all the people all the time.
Privacy Issue
Another widely held concern pertains to the users' email and personal information.
American technology companies, for instance, have been criticized lately for programming their software to collect user information for their own commercial gain, often at the expense of privacy laws. This issue is far from the Iranian radar and consumers are not aware of the consequences of private companies getting their hands on shopping data.
Luckily, online payments are protected in Iran and all systems are still conducted through the banks' online portals, thus restricting the amount of risk a customer encounters.
Price comparison websites also have the local disadvantage of having to compete with independent retailers that do not need to ask the permission of a parent syndicate like in western stores. Overall, the prospect of websites that can genuinely pit the large online retailers against each other is positive. As more people join the digital shopping revolution, the better will be the prices and prospects for consumers.
