8 SAVEX COMPUTERS:The Right Product Mix

The reach of their channel partners proved to be a boon for Savex in 1999-2000. This factor helped them to notch up a total distribution revenue of Rs 127
crore.

Currently, Savex has 13 branch offices with stocking and warehousing facilities at Mumbai, Vasai, Ahmedabad, Pune, Indore, Coimbatore, Cochin, Bangalore, Hyderabad, Chennai, Calcutta, Delhi and Lucknow. It is all set to open offices in Chandigarh and Nagpur soon. Throughout the country, Savex has 1,600 channel partners. Out of this around 200 are systems integrators while around 100 are retailers while dealers and resellers comprise the remainder.

Savex tied up with Samsung in 1999-00 for sourcing HDDs and monitors, which had a significant impact on its bottom line. In fact, Samsung alone contributed to 60 per cent of its Rs 127 crore revenue with sales of 95,000 monitors and 66,000
HDDs.

A strong ERP was developed in-house which concentrated on the typical Indian way of doing business for internal use. Criteria like local levies and post-dated cheques have been factored in. This has given the company a strong MIS, enabling Savex to closely monitor movement of stocks in various cities with alert signals about dead stock.

For push-products like high-end monitors, Savex worked with channels to generate demand, besides holding technical seminars at stock exchanges. The company has also been educating its channel, especially the SI segment, on benefits of Samsung HDDs; so as to break the ‘Seagate mindset’.

Savex believes in having product specific channels. Products like 3Com are sold to channel partners capable of ‘technical selling’. Such channel partners are selected on the basis of their abilities to integrate LAN cards, hubs and cables, which a typical reseller may not be capable of.

Savex’s two-pronged approach towards distribution has held it in good stead. Besides selling more volumes to its existing channels, it also tries to increase its network of channel partners to tap additional demand. Bundling is used to push slow moving products or even when there is a competing scheme going on.

Besides HDDs and monitors, all other products contributed equally to the company’s revenues and volume growth was uniform across all product categories. New products launched during 1999-2000 were US Robotics modems, 3Com Office Connect hubs and routers, as well as LanBit modems.

Savex is aiming for 70 to 80 per cent growth for 2000-2001. Once again the strategy is choosing a winning product mix. It has tied up with Canon for printers and Mercury to distribute motherboards, cabinets, speakers and VGA cards. There are plans to distribute CPUs also.

Savex’s employee turnover is negligible. Around 10 per cent people left the company, while around 15 per cent joined it. Currently it employees 110 people.