A LCD PC at Rs 30K?

Vinay Dalvi

Mumbai

October 23rd, 2007

Mumbai-based Zainul Tinwala of HT Impex is trying to work out the costing for
introducing a LCD-based PC at sub Rs 30,000 in the market by December 2007.
Tinwala has just launched a PC under his own brand - Zen - that cost Rs 11,999,
excluding taxes and Rs 13480, all-inclusive. "With this PC, dealers can
easily make a margin of around Rs 1000, which is much higher than the existing
margins that they earn of around Rs 200 on other PC brands," he said.

The Zen PC is available with a VIA PC2500 chipset, 80 GB hard drive and 256
MB DDR2 RAM. Tinwala is targeting this product at the home and SOHO buyers in
rural markets, where customers are very price-sensitive and not very brand
conscious.

A good example of how HT Impex's plays its cards on price is its projector
that cost around Rs 32,000. Tinwala said that the projector's lamp costs just
around Rs 2000, while other brands have lamps which are priced at Rs 12000.
"This is a huge cost saving for small-budget customers, which is precisely
our target audience," Tinwala noted.

The company posted revenues of Rs 14 crore last year and hopes to double it
this year. It is very clear about its market positioning viz leveraging on its
lowest price offers. "We do not want to compete with the MNCs, as we don't
have their reach or strength. What we want to do instead is offer products at
the lowest price and with good service support," added Tinwala.

Currently, HT Impex has a network of 17 distributors, largely in the western
and southern regions. Now, it is trying to enter the eastern market and is
seeking a distributor in Assam.

Talking about the channel structure, Tinwala said that his company works only
with one distributors in each city and rather than have multiple partners.
"We then develop this distributor by offering localized marketing support,
schemes or specialized upfront discounts. We are also focusing highly on
service, because we have seen that even larger brands have failed on account of
poor service," he noted.

Currently the company offers repair warranty on its products through its
partners and three service engineers.

Though an importer, HT Impex launched its own brand - Zen - four and half
years ago and is currently focused entirely on this business. Tinwala is of the
opinion that it's better to launch an own brand and invest into it rather than
develop some other company's products. Currently, Zen's product portfolio
includes audio devices, mice, keyboards, web-cams, optical disk drives, combo
drives, modems, CAT 5 and CAT 6 cables, etc. Zen's products are sourced from
China and Taiwan and are assembled at a factor in Daman.