Parallel Importer Singapore

Many Singaporeans choose to buy cars from parallel importers instead of authorised distributors (ADs). This is because they offer significantly cheaper prices.

They also offer a wider range of car models and some even carry hybrid or limited-edition models that ADs may not stock. But they come with a few risks that you should consider before deciding to purchase one.

Legality

The parallel import trade is an increasingly common phenomenon across the world. This has provided opportunities for both local consumers and small businesses to access goods at a lower price point.

However, parallel importers must ensure that they are trading in genuine products. This can be difficult to assess and may be more challenging when goods are sourced via a complex cross-border supply chain.

One of the key issues that arises from parallel imports is whether they are infringing a registered mark. This depends on whether the products in question were actually put on the market (whether overseas or in Singapore) by the owner of the registered trade mark, or with its consent.

The recent judgement of Samsonite IP Holdings Sarl v An Sheng Trading Pte Ltd [2017] SGHC 18 highlights this issue and provides much food for thought. It also clarifies how to balance the interests of both the public and intellectual property rights owners in upholding the free movement of goods, while ensuring that their marks are properly protected.

Reputation

Many Singaporeans are still drawn to parallel importers for the cheaper prices they offer. However, a lack of consumer protection regulations means there are also risks involved.

For example, in the past few years, many consumers have lost prepayments as businesses they’ve already deposited money with go bankrupt and fail to deliver their goods or services. This risk is particularly high in the car industry, where it accounted for nearly 33% of lost prepayments reported to Case.

To avoid this, it is important to buy from a reputable parallel importer. These companies can often be found by checking out their track record, background and reviews. They should be accredited by the SVTA for motoring business, which will give you peace of mind.

Safety

Parallel importers often do not have the same level of protections as local authorised sellers. For example, if there is a problem with the product, the parallel importer is not obliged to help or even to tell you where to go to get support.

Moreover, a parallel importer can be found to infringe brand owners’ trade mark rights and other intellectual property rights. This is particularly true for products such as printers where software and firmware may also be protected by copyright.

To prevent these problems, brand owners and licencees can enforce their rights against parallel importers by ensuring that the goods were not put on the market with the owner’s consent or without any misrepresentation or a likelihood of confusion. The parallel importer can also be liable for infringement of the trademark owner’s rights by making any alterations to the product or its packaging which would unfairly dilute its distinctive character. This may not only involve a change to the appearance of the product but also its functionality, such as removing barcodes or machine-readable tags.

Warranty

Unlike the Authorised Dealers (AD) who have exclusive distribution rights for a particular car brand, parallel importers purchase cars directly from the factories producing them. They then import them to Singapore and sell them at a significantly lower price, which enables them to offer consumers more choices.

In order to protect customers from scammers and shady businesses, the Consumers Association of Singapore (CASE) has recently introduced an accreditation scheme to ensure that parallel importers are legitimate and safe to deal with. Under the CaseTrust-SVTA Joint Accreditation Scheme, companies are required to commit to certain criteria, including taking up a $50,000 insurance bond.

This is an excellent way to separate shady parallel importers from legitimate ones, and can save consumers thousands of dollars in deposits they might have had to put down. But before you sign on the dotted line with any of them, always do your homework and conduct a background check first.