Entry-level UPS segment set for price war

The entry-level UPS segment (below 1 kVA rating) is all set to witness a fierce price war. This product segment has MNC players like APC, Powerware, Powercom and national brands like TVSE, Wipro ePeripherals, Microtek and Champion among others, trying to outdo each other. And price being the most critical aspect governing the sub-1 kVA UPS sale, most have resorted to massive price-cuts. 

APC triggered off this phenomena by slashing the price of its entry-level model, by nearly 30%. The 500 VA AVR Pro model, which APC was previously selling at Rs 4,500, was replaced by a newer model, Back UPS ES 500, priced at Rs 2,995.

Wipro ePeripherals too reacted immediately to the price-cut by dropping prices of its entry-level models by around 15%. Its eMerge 500 VA UPS is currently priced at Rs 2,990, while the 600 VA model, previously priced at Rs 4,500, is now available to resellers at Rs 4,000. Companies like Powercom and Champion too have consequently brought down their prices to keep it 10-15% lower than those of APC. Both are currently offering their 500 VA models in Rs 2,600-2,800 range. Microtek is reportedly offering its entry-level UPS model at just Rs 1,995. 

Most resellers feel that the drastic price-cut is a deliberate move by MNC and national vendors to kill the strong competition from local UPS manufacturers. Currently, local UPS vendors are estimated to command nearly 50% marketshare in the entry-level product segment. While agreeing to this reason behind price-drops, Anand Iyer, Country GM, APC India adds, "The second most important reason for reducing the prices is that we want to make UPS a more acceptable and essential IT equipment in the home and SOHO sector." He feels that by lowering the price-points, not only competition from local players will weaken, but it will also drastically increase the UPS market size.

However, this just seem to be the first round of price-war. Sources close to APC indicate that within next two-three months, the company will further drop the prices of its entry-level models by about 15-20%. "With volume sales going high by leaps and bounds, APC can well afford to further slash its prices and we are quite confident that it will do just that to wipe out the competition," remarks Kailash Baheti of Power Technics, a key APC reseller. While declining to confirm this, Anand doesn't rule out the possibility of a further price-drop. 

This means some reactive actions from competitors too will happen. "We will ensure that our prices are kept 10-15% less than that of APC and our increasing sales will enable us to do that," informs Tejas Sheth of Zeta Technologies, a distributor of Powercom UPS in the country.

GOLDIE

MUMBAI