With metros getting saturated, vendors are rushing to B and C-class cities to
increase their sales. Dealers and resellers in these cities are finding new
business opportunities as vendors are keen to explore their business contacts.
Vendors find another advantage in these cities. They have an opportunity to
push entry-level monitors here, while metros are looking for high-end products.
In
most of the C-class cities, the emphasis has been on market development. Vendors
like Philips, LG Electronics and Benq (formerly Acer Communications &
Multimedia India), have found their stronghold in some of these cities.
In fact, LG Electronics and Philips have a larger market share than Samsung
in some of these cities. According to these vendors, markets in the metros have
reached a point where it is difficult to gain market share. However, this does
not mean that they are shunning the metros totally.
Demand for 15"
According to market sources, the demand in C-class cities is primarily for
15-inch monitors, though 14-inch is still considered as entry-level. Also,
awareness is on rise as far as high-end monitors are concerned. Says Pankaj
Sharma, Head, IT Sales, Sharp Systems says, "The decision of buying a LCD
monitor may not happen here. But there has definitely been an appreciation of
the product quality and benefits in these cities."
While the market opportunities in B and C-class cities are for real,
turnaround time has become a hurdle. The turnaround time from planning to final
delivery of products is roughly three months. So one is sure of the market
situation at the end of the cycle.
What adds to the problems is the remoteness of some of these cities and the
problem of reaching them. If there is a sudden demand, like from an institute,
there is not much corrective action that one can be taken if the channel partner
does not have enough stocks.
Strategies for upcountry cities
This financial year started with several vendors tying up with channel
partners who have strong presence in B and C-class cities. For instance, BPL ERL
tied-up with Nebula Technologies as its national distributor. Says Mohit Mathur,
Sr Manager, Sales & Marketing, BPL ERL, "This tie-up has given us reach
and wider network spread across metros and B and C-class cities."
BPL ERL is in the process of conducting roadshows in these cities jointly
with its distributors to showcase the company’s range of products. BPL has
also recently participated in Compex 2002 exhibition at Nagpur and a consumer
exhibition CIPEX at Secunderabad emphasizing company’s focus in these cities.
"Both these exhibitions have aroused good response from end-users,"
says Mohit.
BPL
has also received good response from cities like Indore, Ankleshwar, Akola,
Nagpur, Jaipur, Coimbatore, Vijaywada, Hubli, Pune, Belgaum and Cochin among
others. "We hope to consolidate our position in other cities with the help
of our national distributor," adds Mohit.
Apart from tying up with channel partners, several companies are also
organizing events as well as participating in them to drive up customer demand.
Sonal Anand, Country Product Manager, Samsung India says, "Our investments
include participation in local trade fair, IT exhibitions and local events to
spur customer buying into IT."
Though a late entrant in the Indian monitor market, Philips has added
momentum to its campaigning in B and C-class cities. Says Sanjeev Jain,
Head-Peripherals Division, Philips, "Our strategy is not to have national
distributors. Instead, we have appointed regional distributors, because that is
the best way to reach unexplored regions."
According to vendors who have ventured out to upcountry regions, a national
distributor may not be in a position to show his presence here. The initiative
taken by Philips to appoint around 80 regional distributors in C-class cities
only emphasizes this further.
Also, the regional distributors have an advantage over national players
because of their logistical edge and intimate knowledge of the local market
conditions.
Making inroads
LG has reportedly sold a record number of its Flatron brand monitor in various
regions of Maharashtra recently. Resellers estimates also show that LG Flatron
has done well in upcountry markets. Benq, which was keeping low in promoting
their monitors, now feels the need to push monitors to achieve better brand
visibility. According to Benq MD, Sandeep Nair, they have been pretty strong
with their other products like keyboards, CD-writers and scanners.
"We think that promoting monitors in a big way will surely give us the
required visibility for our brand," says Sandeep. He also joins others in
looking at B & C-class cities as a potential area for good business
propositions. "We are looking at 30-odd cities for extending our
business," informs he. Expressing similar sentiments, Sanjeev says,
"We will continue to sell in the metros, but our focus is going to get
stronger in B and C-class cities."
Market waiting to be explored
IDC data indicates the strong emergence of small towns as far as IT business is
concerned. Understandably, monitor business would also witness a relative
growth. While metros are reaching a peak as far as automation is concerned,
there is still a greater potential to be harnessed in the cities with population
between 5 and 10 lakh.
Among B and C-class cities, Allahabad and Guwahati in East, Mysore and
Vijaywada in South, Nasik and Aurangabad in West and Agra and Amritsar in North
are reportedly the ones with the greatest market potential.
All these facts are indicative that PC penetration is yet to achieve a crest
in these cities. And with monitor business being directly proportional to PC
sales, the signs are more than just good. Accordingly, vendors can set their
sights to do a flourishing business in these cities and strengthen their
bottomline.
In a nutshell, there is evidently a large untapped market lying in B and
C-class cities in terms of PC penetration. As a result, both vendors and
partners have every reason to be bullish about the way monitor business is going
to shape up.
SUNILA PAUL in Bangalore with inputs from NELSON JOHNY in Mumbai and MOHIT
CHhABRA in Delhi