Diwali Gloom: Market Down By 40 Percent

It's that time of the year again, when vendors announce exciting offers, and
new products are launched to herald the arrival of Diwali. But this year much of
the excitement and hoopla surrounding this festive season has been doused owing
to the current economic situation. Leading sub-distis in the region claim that
this year's sales have gone down by up to 40 percent. While the fourth quarter
has traditionally been one which partners have looked forward to, this year the
grim situation brought no cheer from this front. Not only has the fluctuating
dollar adversely impacted the IT business, the channel feel that the recent
trail of bombs and bomb-scares have got people avoiding the usual shopping
sprees during this time.

North

Partners in North marked a stark difference in sales as compared to last
year. Harish Puri of Computer Empire, New Delhi shared, “This time the market
has been very slow and there is no excitement as such for Diwali. The reason is
not only the global financial crisis but also the terror incidents that have
happened in our country, which have affected the movement of customers in
markets during Diwali. Therefore, the market is not happening enough to excite
customers and retailers. The market has been sluggish for the last one and a
half months. Since the volume of the business is still ok, we are witnessing a
20-25 percent YoY growth.

The overall sluggish economy prevailing across the globe, cautious spending by customers, cost cutting efforts from enterprises are a few reasons partners attribute to the dull sales this season

Pointing out this year customers were preferring to buy either consumer goods
or jewelry rather than IT products, Ajaya Kumar of Park Computers, New Delhi
said, Instead of IT market, more rush is visible in the gold, silver and white
goods market. For the last 10 years, our YoY growth has been more that 20
percent. The market is slow in this quarter, but we are maintaining out
performance.

Like other market across the country, Rohit Kohli of Comexcell Technologies,
Kanpur lamented that the Kanpur market is also slow, and there is no excitement
among customers. This is also owing to the shortage of money.

Reminiscing the sales during last year's Diwali, Manish Mehrotra of Allahabad-based
Tritech Enterprises said, Diwali this year does not seem to be as exciting as it
was earlier. Last year only, we had done amazing business but this year sales
have dropped by 40 percent. It does not seem to be a festival season and the
market is so slow. I have never seen such a dull Diwali in the last 42 years. We
are just hoping that the economy improves and the flow of finance resumes.

South

The overall sluggish economy prevailing across the globe, cautious spending
by customers, cost cutting efforts from enterprises are a few reasons partners
attribute to the dull sales this season. “We are witnessing dull sales for the
past one month. Business hasn't been that good and there is no enthusiasm over
Diwali here,” claimed Yasapal Jain of Devraj Computers, Chennai.

Rakesh Jain of Supreme Computers informed that for the last three months the
market has been witnessing a slow period. “Compared to last Diwali, this year
sales has been really dull. We are keeping our fingers crossed,” he said. He
added that it would take some time to estimate the total amount of business for
this season. “But I am sure that it will be a dull period for the overall
channel industry,” Jain claimed.

According to Vinod Jain of Computer Planet, Chennai, cautious spending by
customers and a decrease in the investments in the corporate sector has impacted
the growth of the company. “The overall market is average and it is not as per
the expectation for the IT industry,” said Sanath Babu of Sri Durga Computech,
Bengaluru. “The Pujas were good for us, but still we expect Diwali to do even
better. Buying has been more need-driven. This year we saw a 40 percent dip in
sales as compared to last year,” he added.

For Tejinder Singh of Access Computers, Chennai, this is the worst time that
he has seen in the market. “There is virtually no sale happening in the retail
showrooms. It is the worst situation I have ever seen in the market ever in my
career,” Singh claimed. He also blame the weather for playing spoilsport. “The
usual business that used to happen is not happening due to this bad weather in
Chennai. Every year it rains but this year it has rained more than normal,” said
the dejected retailer.

Sub-distis in the upcountry regions in Tamil Nadu too are feeling that the
Diwali craze is missing among customers. R Mahesh of Ozone Computers shared, “We
are feeling the pinch, as the sale is not happening. On the other hand, even if
the sales are happening there are some financial defaults,” Mahesh informed.But
dealers in Hyderabad showed mixed response to sales during this period.
According to Ahmed Ali of Compaq World, business has been quite good for this
season. “We have sold almost 470 plus laptops and desktops this month alone,”
claimed Ali.

West

Lamenting the poor sales during the period, Anees Khalfay of Radiant
Technologies, Mumbai said, The market is running very slow and sales are not
happening in the market. We are not getting any requirements from corporate
segment during this period. But this can be attributed to fact that the
recession in the market.

Every year partners enjoy good sales during the festive season, especially
after Dashera, which is when the actual purchasing starts. Talking about this
issue, Talkin Zamindar of Media Infocom, Ankleshwar and Baruch attributed the
dip in business to issues in the region. “This time the market is has gone down
by 40 percent low and according to me it has nothing to do with Diwali. In
Ankleshwar and Baruch there are two major reasons for low sales in IT products.
One is the recession that's going on across the country. Footfall has come down
to30 percent. 30 to 40 percent of customers ask for EMI or installments. The
second reason is that in our region we had a tie-up with Bajaj Company for
offering support on IT products, but now because of the financial losses they
have incurred, they are recovering their money and will close the office in
Ankleshwar and Baruch region.

East

This year has proved to be rather bad for the East region. While first it
was the wrath of the Kosi river that cornered off the region, later it was the
issues boiling up in Singur, not to mention, the on and off bundhs that are now
a common occurrence there.

According to Naveen Gupta of Patna-based Krishna Agency, Bihar is one state in
the region, which sees many a students coming to study. The main customers are
the non-residential students of the state who return on the eve of Diwali and
Chhat Puja. With the cancellation of trains in Bihar, the students have not been
able to return to Bihar. So retail has suffered a huge setback due to this
situation.

“IT retail has been hit hard by the global slowdown. With the increase in
hardware prices, sales have gone down considerably. Even then, sales have been
constant but not as high as we had expected before. Although a considerable
transaction is going on in the market at present, it is a bit lower than what it
was in the previous year. However, we are optimistic that in the week of Diwali
sales will see an upward trend,” commented Pawan Jajodia of Mohit Electronics,
Kolkata.

In Bhubaneswar, Anil K Chowdhury of Maple Computers was upbeat about the
retail situation in the state. “Orissa is seeing a boom in terms of IT retail
with the government taking more initiatives than ever before to boost the IT
infrastructure in the state. As
e-gov projects are becoming a big hit in the state, the government is relying on
local supply of computers from the dealers in the state. This has given a major
boost to the retail scenario in the state. Also, the performance of the
upcountry has been consistent. We are expecting a huge boom in the coming week,”
said Chowdhury.While the general feeling in the IT market has been low, partners
are optimistic that the scenario would get better in the next two or three
months time.

(Inputs from Amrita Tejasvi, Sethuraman NR, Lipsha Das, Archana
Swamy and Avishek Rakshit)