TVSE re-orients its channel strategy

TVS Electronics Ltd (TVSE) has reoriented its channel strategy and has decided to work only through national distys. It is realigning its channel structure to provide equal opportunity for resellers and create a level playing field for partners. 

The company has worked out a five-pronged strategy to increase its channel network, thereby reaching more cities, strengthening the service infrastructure, expanding the product portfolio, and creating more brand awareness and visibility in the market. The Rs 228 crore Chennai-based peripheral manufacturer is getting aggressive on the channel front to increase its business and reach a revenue target of Rs 500 crore by 2006. 

TVSE's aggressive programs has increased the channel contribution to the total revenue has increased from 50% to 75%, over the past one year. According to TVSE Head, Channel Marketing and Distribution, S Magesh, "We will be moving on to the next stage of development and growth in the company and 2004 will be a turning point for us." 

TVSE, which was mainly operating through its regional distributors, is now focusing on national distributors for better reach and availability across the country. It appointed Redington as its third national distributor in October, in addition to Ingram Micro--appointed in 2000--and Tech Pacific--appointed in 2002. "We have already moved all our regional distys under these national partners in eight markets. Soon all regional distys will be renamed as re-distribution partners (RDPs), who will buy products only from national distributors," pointed out
Magesh.

The company has around 130 RDPs across the country at the moment and plans to scale this number up to 250 within the next one year. Similarly, TVSE will increase its reach from 360 cities to 500, especially in B-and C-class cities, during this period. It will also appoint one person to cover 10 to 12 cities, which will be grouped as a territory. 

This expanded reach is all the more important for its DMPs and help it increase its marketshare to 50% by 2004, hopes Magesh. Currently, TVSE enjoys 44% marketshare in this segment, as per the IDC report for AMJ 2003.

While realigning the channel partners, TVSE wants to form special groups for specific product segments to avoid unethical competition among resellers. "Even with distributors, we will have this practice, which will give clear focus and more revenue for the company. However, there will be some RDPs--around 25% of the total--who will be allowed to sell all products," pointed out
Magesh.

TVSE plans to market UPS systems only through Ingram Micro, while Redington and Tech Pacific will work on geographical basis for consumables. Redington will primarily address south and east, while Tech Pacific will take care of north and western regions.

ASIM RAINA AND S GOPIKRISHNA

CHENNAI