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Here Today, Gone Tomorrow

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DQC News Bureau
Updated On
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Every year, several brands of peripherals enter the Indian market and take

the channel route in their bid to make money. While some stay, most of them

disappear, leaving channel partners in the lurch, especially with the post-sales

support issues

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Given the rising IT business opportunity in India, several brands of

keyboard, mouse and UPS entered the market with enthusiasm, but slowly retreated

after the initial euphoria wore out. Often, they vanish as if they had never

existed.

These brands foray into the market without any proper planning and in some

cases they are in search of immediate profits. The motive is to make the most

out of the slightest opportunity, which is why they try to ape the known brands

in this space. The moment they start losing money they run away from the scene

leaving behind several unheard claims, unattended and dissatisfied customers not

to mention furious dealers and distributors

Ever wondered why these fly by night brands fail to make a mark? An obvious

answer would be because of steep competition and inferior quality of products.

But there is more than just competition and quality that forces them to withdraw

from the market.

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According to Amit Kumar Kedia of Delhi-based Tech-Com brand of products,

almost every one now dabbles into import and due to lack of good planning, they

flop. “Companies don't do any proper planning, and enter into the market in a

disorganized way,” he noted. He further added that these companies fail to

understand that there are several legal implications that have to be adhered to

and a strong framework has to be drawn in order to sustain and flourish at a

later stage.

Peripherals rule



Apparently this practice of getting into business one day and getting out

the other is rampant in peripheral markets, including keyboards, mice, speakers

and UPS. It is easier to get into this space as a high technical expertise or

market research is not required to design these products. But this business is

not easy to sustain either.

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Brands like F-Line, Annie, Advik were such brands, which were in the market

and catered to a large chunk of SOHO customers. Today only a few of the dealers

are aware of them.

“Such brands are nothing but imported material from countries like China and

Taiwan and all they needed to do is coin a fancy name to sell the product and

further it in the market. They calculate rough margins and almost overlook the

warehousing cost,” said a dealer who was earlier selling one of these brands.

The idea basically is to sell a variety of goods to get maximum revenues.

They essentially sell in volumes and the entire business model is designed to

boost sales. In a nutshell these brands don't want to struggle and adopt the

'wait and watch mode' in their bid to survive in the market.

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Aditya Vikram, owners of Delhi-based Compware and Advik brand of peripherals,

however denied that Advik has been withdrawn from the market. “Advik is in the

market and we are looking to add networking products under the same brand name.”

But he did agree that there has been a change in the strategy when it came to

selling Advik products. “The company was trying to revamp the way it has been

functioning and hence the rumours may have been very well the result of the

same,” Vikram mentioned.

In Panipat region, companies like Adcom, Ankit (peri­pheral brands) were till

sometime back actively present in the market. But all of a sudden these brands

have ceased to exist.

Ajay Singla, President, Panipat Computer Dealer's Association clarified,

“There have been many such brands and companies that approach dealers in the

upcountry location thinking that we are easily approachable and leave behind

stocks that later becomes difficult to liquidate.”

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Prime products



The UPS industry is another such segment that has a huge scope for the

lesser renowned companies to try their hands at. It is the SOHO market where

these not so popular brands try to make money. They offer lucrative prices to

the dealers who are not making any margins in the entry-level UPS category.

Under such circumstances, a dealer is bound to fall into the trap of a company.

Alok Jain, CEO, Arihant Powertronics stated, “It is only in online UPS and

offline UPS for the enterprise category that dealers like us earn handsome

margins. In the entry-level UPS that is meant for the SOHO segment, the margin

is almost negligible unless we sell in volumes.”

Brands like Pioneer, Intelligent or Power Link among others which had been

operating in the market some years back are nowhere to be found. Solus was yet

another brand that disappeared from the Panipat region.

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Motherboards are yet another category where many companies offer cheaper

options to a market that is not looking to shell out a huge sums for a defunct

motherboard.

Brands like Omaxe, Mora had motherboards to cater to the replacement market

and assembled PC sellers. These brands at one point in time were present at most

IT hubs but have now faded, leaving behind clueless customers and system

integrators.

How the channel suffers



“It is not only the leftover stock that has to be taken care of, but our

relation with customers too get affected. If it is a big company then we can

forward our plea but with small ones the scenario changes as there is no

official person to approach,” opined Singla.

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However, Dhiraj Tody, CEO of Gazhiabaad-based Parity Computers and

sub-distributor of Solus brand of UPS in Uttar Pradesh and parts of the northern

region clarified, “In Panipat, Solus did have a presence and the company was

present through us for atleast one and a half years. However, since the demand

was not as high as in the other regions, they resolved to discontinue selling

the brand in the region.”

A dealer from the north pointed out that many times he has bought stocks from

a particular company only to have it lying with him for months, because the

brand is not known. Under such circumstances if a company ceases to exist, then

handling the stock and warranty becomes a tough task.

Chennai-based Navin Sethia, CEO, Delta Peripherals who deals in peripherals

such as motherboard, speakers, cabinets and accessories among others stated that

even the southern India market is not untouched by such unpopular brands. “Every

year about 14-15 such brands enter the market. Out of these only five to six are

able to sustain in the market, the rest vanish from the market or wind up

operations, and it is the dealer who ends up incurring losses,” he said.

He further indicated that the way these brands make their way into the market

is by offering lucrative schemes and low price points to the dealers. Traders,

who want to make fast money and do not have the financial muscle to keep larger

stocks of branded items, fall prey to such companies.

Another problem arises when these companies change their distribution chain.

“They change their distribution chain and the person who had purchased stock

from him is left in the lurch. In such cases even if they provide warranties to

them it becomes difficult to trace the source from which the product was

originally bought,”Sethia added.

He also indicated that it is not only in peripherals that one can come across

such brands. Even in the PCs (desktop), southern region has seen brands that at

one point in time entered the market and are now nowhere to be found.

Singla suggested, “The only solution to get rid of this problem is to get the

companies enlisted with the associations so that in case the company disappears,

the association can intervene in the situation and take stern action against

them.”

Ashish Jain, President, Bhopal IT Association men­tioned, “Since these brands

vanish from the market, warranties become the headache of the resellers and the

dealers who end up either landing in financial trouble or hampering relations

with their customers. Again, since the members of the association and other

dealers do not take interest in this actively eventually they face problems.”

These measures might not prevent unknown companies from entering India and

promising partners a lot of goodies for sales. Ultimately, partners have to use

their prudence to decide if they want to stick to the volumes and low margin

game or focus on offering good solutions and building a strong clientele

instead.

POOJA SHARMA



poojas@cybermedia.co.in

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