'We want to increase our market share to 30 percent within a year.'

From the time ASUStek started its operations in India some four years ago, Shawn Shu has been the sole person visiting India as the company's representative. However this time, his colleague Ralf Teng also joined him. While both share the same designations, Shawn has played a greater role in establishing the excellent image of Asus in India with help from its distributors. The duo shared Asus' plans with DQCI on their recent visit to India.

What are ASUStek's immediate plans for India?

We are increasing our product range as we see a good business potential in the Indian market. We have been selling motherboards and VGA cards till date and will continue to add newer models in this category. As far as the new product lines are concerned we will introduce notebooks, PDAs and cable modems. To start off, we will bring in notebooks for the market here.

But Asus notebooks are already available in the market!

There hasn't been an official launch yet. The notebooks available so far were only meant for market testing to gauge the response form our customers.

Do you plan to appoint new channel partners for selling these notebooks?

We are interviewing prospective partners because the existing channel cannot cover the notebook market that efficiently. They seem to be highly interested and so we are talking to them about various possibilities. As far as we are concerned, we will have to find the most capable and cooperative candidates. Of course, we would continue to have Rashi Peripherals as our main associate.

By when do you think would you finalize the candidates for selling notebooks?

We are not in a hurry. We have received proposals from many candidates and will have to make an overall assessment. In all probability, we will reach a decision latest by the end of this year.

How has the response for notebooks been in the test market?

The response has been good so far. But there are other aspects which we have to tackle. Service is one of them. If a customer requires a notebook component, we have to ensure that it is available to him. We are in the process of studying all the factors and sorting them out.

How do you handle service requirements for motherboards?

We work closely with Rashi Peripherals on this front. We have authorized them to do local repairs as it is very difficult to send back a product for

RMA.

What target have your set for your motherboard business in India?

At the moment, we have around 10 percent market share for motherboards in India. Our plan is to market our product more aggressively. We want to increase our market share to at least 30 percent within a year. I think the Indian market is growing and now our focus will be on prices. Our prices so far has been slightly on the higher side.

What is your channel strategy?

We do not believe in providing exclusiveness. We want to make our channel dynamic and so we keep our options open. Right now we will be concentrating on the existing channel. We want to gear up our service network to a better degree. But in the meantime, as more products are being added, we are seeking additional channel partners to push our all-new product range.

What is the criteria for appointing a new channel partner?

We have very stringent criteria for selecting channel partners. It is a very elaborate process and candidates will be selected after being subjected to a long auditing.

How do you plan to counter parallel imports of Asus motherboards in India?

Our immediate step is to collect a few motherboards and obtain their serial numbers to find out where they are coming from. Once identified, we would take serious action against the culprits.

Besides parallel imports, we are also facing the problem of fake motherboards. We will soon come out with a list of differentiators that would mark Asus products to identify the fakes from originals. We will be displaying these differentiators at every reseller outlet so that buyers can cross-check while buying Asus products. We are also talking to the media to educate the customers about this.

Are parallel imports illegal?

Parallel imports may not be illegal as far as the Indian business is concerned. However, the ones who export them to India do it so by breaching the agreement with Asus.

When a distributor is appointed anywhere, he/she is supposed to sell only in one particular area. Once we identify the source, we will take strict action against those distributors who export Asus products to India breaching their contractual obligations.

According to Rashi Peripherals' officials, those indulging in parallel imports are selling motherboards at 15-20 percent discount after keeping a profit margin of 20-22 percent. Does this mean, authorized distributors are selling Asus products at a very high price?

No. They manage to sell the products at a low price because parallel importers under-invoice dramatically. For them the buying cost comes out to be cheaper because they indulge in improper means of importing.

You have been operating in India through your distributors for the last four years. Do you have any plans to open an office in India or set up a manufacturing unit?

Yes, we do want to set up an office In India. We are actually seeking some candidates to be stationed over here. As far as manufacturing facilities are concerned, we do not have any immediate plans. For setting up a manufacturing facility we should first achieve a certain market share.

We have recently set up large-capacity manufacturing plants in China. Today, the facilities at Taiwan and China together have a capacity to roll-out nearly 1.8 million units a year. If we foresee the manufacturing capacity of these plants reaching their limits, then we might consider something for India as well.

NELSON JOHNY

in Mumbai