Small Towns Beckon

'Directions 2002', the recently held 14th annual computer industry briefing of IDC (India) Ltd, presented an interesting study that sheds light on the opportunities that are available in small towns.

The results of this study are very relevant to the channel that faces one of the worst business crunches in recent times. The facts and figures in the study clearly chart out a new direction for partners to pursue. 

According to IDC, small towns today contribute only nine percent of the total IT market of the country and IT in small towns is growing at 28.5 percent. This kind of a growth is certainly a gold mine in a slow market. 

So, heading for small towns with your ware may be a good idea. IDC points out that the IT market size in small towns is 20 percent among homes and 80 percent in commercial areas.

The commercial pie of small towns has a wide choice. Manufacturing takes up 37 percent space followed by education at 21 percent. Services is in the third place with 19 percent. Finance comes next with 16 percent. Others make up seven percent. These facts clearly point out the business potential of various segments in small towns.

Which towns have the highest potential? The market potential index (MPI) at 42 is highest in towns with population of 40 lakh and above. There is only a marginal difference between the potential in towns with population of 10 and 40

lakh, and five to 10 lakh with index hovering between 25 and 23 respectively. 

You want to know which region to go? IDC tells to go north, especially to towns like Agra and Amritsar where the MPI is the highest at 60. The western region comes next with towns such as

Nasik, Aurangabad and Jabalpur with an MPI of 54. The MPI of south and east is almost the same hovering around 40.

Thus, the opportunity in small towns is certainly looks attractive. For partners who, at this juncture, are cash-starved and struggling to survive, smaller towns can turn out to be the promised land. 

Besides the small-town opportunity, there are other ways by which partners can overcome a bad market which we have presented in two separate articles in this issue feeling the channel pulse which is racing because business is coming in only in trickles.

One of the articles rightly advocates the use of creativity in the place of cash. This is of course easier said than done. The natural tendency is to panic.

We liked a partner who did not panic but put up a demo center next to a dhaba on the Pune-Goa highway and converted the walk-ins into orders! This is creative thinking at its best. 

So, small towns are beckoning with all the opportunities. Those who make their creative first move are sure to be ahead of others in beating the market slump.

sylvesterl@cmil.com