1. Tech Pacific: Add Value, Gain Market Share

CEO (Asia-Pacific): Shailendra Gupta START-UP YEAR: 1986 NO OF PARTNERS: 7,000 BRANCHES: 24 PRODUCTS: PCs, peripherals, networking products and software distribution AGENCY OPERATIONS: HP, Intel, IBM, Sun, Compaq, Microsoft, Samsung and Cisco ADDRESS: 1A, Godrej Industries Premises, Off Eastern Express Highway, Vikhroli (E) Mumbai 400 079 TEL: 022-5960001 FAX: 022-5960102 WEBSITE: www.techpaconline.com   POINTERS TO PERFORMANCE Focused attention on moving partners up the value chain Substantial improvement on logisitc support POINTERS TO FUTURE Growth will see a dent  Will adopt aggressive strategies to beat the slump

Tech Pacific (India) Ltd (TPIL) focused on providing high-level logistic support to its partners during 2000-01. For instance, in Delhi, Bangalore, Hyderabad, Kolkata and Chennai, TPIL delivered goods within three hours of placing an order.

However, partners in Mumbai could not enjoy this facility due to octroi problems. Elsewhere in the country, goods were delivered at the doorstep of partners within a maximum of eight hours.

TPIL saw potential for profits in value-added services and thus, placed greater focus on its value division. Partners too saw value in this proposition. The result was that over 70 mid-size partners migrated from commodity trading to providing high-end services.

"Whatever the channel wants, Tech Pacific provides it and I feel there are no outstanding channel needs that we have to look at," says Shailendra Gupta, CEO. This confidence possibly stems from the fact that TPIL holds highest market shares for products of 32 principals out of a total of 35. 

TPIL has developed well-documented policies for retailers with customized credit and timely delivery of stocks. It has endeavored to build traffic to retail outlets through the schemes of its vendors.

The declining growth is a worrisome factor for TPIL and the trend is expected to continue this year as well. If the growth was 61 percent in the previous year, it has declined to 47 percent this year and Shailendra expects a growth of only 23-24 percent this year. "In the context of vendors forecasting a flat growth, it's going to be tough to maintain previous growth figures," says he.

On a large base of revenue, and in a slow-moving economy these developments are on the expected line. Accoring to Shailendra, TPIL did Rs 1,600 crore during last calendar year and he expects to achieve revenues of Rs 2,000 crore during January to December 2001. 

Going by the current market conditions even the fiscal year 2001-02 revenue should remain around Rs 2,000 crore. Anything more than Rs 2,000 crore should come as a bonus to the No 1 distributor in the country.

Warranty support became a ticklish issue with TPIL during 2000-01, especially for its value division. In its quest to focus on value-added services, it started pushing high-end servers and network equipment hoping that vendors would give the same warranty support that they provided to big-time systems integrators. But that was not to be.

If big SIs got three-year warranty on the equipment, TPIL got only three month's warranty! The SI-centric vendors could not help TPIL in the face of pressure brought on them by the SIs. The issue is still to be resolved.

The distributor also faced music from channels' side for no mistake of its own. The channel had locked up its working capital with the vendors by going after big-ticket promotional schemes. The result was that the partners ran short of cash and purchase orders were slow in coming.

During the latter half of the fiscal year, TPIL had to live with the reality that its parent company Hagenmeyer wanted to sell off the IT distribution business. Though the competition did say that it was buying out TPIL, that however did not happen.