REGIONAL vs NATIONAL PLAYERS: Line Gets Thinner

The UPS industry saw the weeding out of a number of operators in the unorganized sector due to the slowdown. To ensure customer satisfaction, regional players started focusing on product quality and service. With prices going south, the differentiating line between regional and national players gets thinner.

The fact that the UPS industry is highly fragmented is common knowledge. And

smaller manufacturers, primarily referred to as the unorganized sector, made a

lot of hay in previous years. Industry estimates put the number anywhere near

500. The unorganized sector mushroomed with the rise in the PC population.

But in the second half of last year, tremors of the slowdown became evident

and the shakeout began. Manufacturers producing machines out of single-room

facilities have started shutting shop. While pricing is still the most important

consideration; product quality, service and support have become critical issues.

SURVIVAL OF THE FITTEST



Despite the fact that the survival of smaller players is getting

increasingly difficult, the industry still witnesses stiff competition.

The Association of UPS and Power Conditioning Systems Manufacturers (AUM), a

Delhi-based association, puts the number of players in the organized sector at

over 300.

Competition in the UPS industry can also be viewed as a boon since technical

expertise is being enhanced. There is an unanimous appreciation of the fact that

Indian power problems are vastly different from those prevalent in western or

even East Asian countries.

As a consequence, more and more companies, both at regional and national

level, are developing and designing products to best meet Indian needs. Says

Kunwer Sachdev, CEO, Su-Kam Communication Systems, "The power problems in

India are rather unique and therefore imported technologies are not as effective

here." To address this the company has set up a research and development

facility locally.

Adds Sanjay Agrawal, Director, Quasar and President, AUM, "We are

constantly redesigning and evolving our product line to produce something

better." The emphasis on R and D will help utilize the skills and the

knowledge of the local engineering talent that has an in-depth understanding of

power issues prevalent in the country. The local product will have greater

intrinsic value for money because of its indigenous design.

AUM proposes the setting up of a common laboratory for the purpose. Says

Ashok Mazumdar, Executive Director, AUM, "Pooling of resources will help

faster adoption of the technology."

PRICE COMPETITIVENESS



While a price war is not really on, prices have definitely become

competitive. This was the primary reason why most companies in the UPS business

reported either a fall in revenue figures or a no-growth situation despite the

fact that unit sales saw a growth.

All companies have evolved a strategy to ensure that competition is kept at

bay. While the unorganized sector players have differentiated themselves on

price, it is not something that the bigger players in the market have resorted

to. Admits Ranjit Mohite, Joint MD, Aar-em Electronics, a player strong in

western and southern India, "Our price points are less or equal to other

brands." Adds Vinayak Joshi, Regional Manager-Marketing, DB Power

Electronics, "Low prices is the only strength that local players

enjoy."

Regional and national players are ensuring that product differentiation works

to their advantage. Says Deepak Sharma, MD, Powerware, "We are creating

differentiation along the lines of feature-rich products and value offerings, so

that choices are available to our customers." Adds Sanjay.

Adds Kunwar, "A reliable product offering is extremely essential for

survival." Su-kam is positioning itself as one that offers robust products.

This, he feels, helps the company and partners to save costs that would have

otherwise been incurred on servicing the product.

SERVICE MAKES THE DIFFERENCE



The other parameter, which more and more companies are using to distinguish

themselves in this over-crowded environment is service and support. Partly

because the customer has now become mature enough to understand that price is

not the only important factor.

This helps retain the customer, and reduce the threat from smaller players.

Smaller players don´t have the capability to create and run an extensive

support network.

Says Vivek Jain, Director-Marketing, Microtek International Limited, "We

have a countrywide network of customer support centers, which helps us in

creating a superior credibility for our products."

Adds Deepak, "Besides national distributors, we are appointing regional

distributors and business associates to provide a truly comprehensive nationwide

service support network."

Guard Electronics is still maintaining UPSs that it had installed 15 years

ago. Says Ramesh Khosla, "Obsolescence does not exist for us." The

company either upgrades the product at the customer’s site if the model is

being phased out, or maintains stocks and spares of old models.

EXPANDING REACH



More and more regional players have national aspirations today. And they

have adopted a multi-pronged approach to be able to fulfill this. The most

natural thing to do is reach out to the upcountry market.

To address the needs of these smaller towns, companies have in the recent

past launched a number of plain-vanilla UPSs. This move helped because a larger

segment of the market being addressed in smaller towns is the home or the SOHO

market, who prefer a frills-free product.

Most companies prefer adopting quality standards to ensure greater

acceptability in regions where brand awareness is either missing or minimal.

Most regional players also had manufacturing facilities that were ISO certified.

Says Vijay Mehra, Director-Marketing, Elnova, "We are extending our ISO

certifications to our marketing offices too."

Guard Electronics ensures that all products manufactured undergo a 72-hour

full-load soak test before being finally rolled out.

Also the company has put together an elaborate system to track all quality

control tasks for three years.

And it is the customer who is the ultimate winner. The customer today is

getting the best of both worlds – price, service and quality. And while the

competition from regional players would continue to become stiffer, national

players too would, in days to come, devise newer ways to address this

competition.

MOHIT CHHABRA in New Delhi with inputs from GOLDIE in Mumbai