'We intend to appoint third-party service partners throughout India'

George Tsai’s recent visit

to India was meant to

dispel rumors about Umax

closing down and to chart

out plans to regain its lost

marketshare in the

country. He believes

that by introducing better

products and creating a

strong service backbone,

Umax would be able to

capture 35 percent

marketshare by the end

of the next year. In an

exclusive interview with DQCI, he reveals some of

Umax’s strategies for the

future, including its plans

to set up a joint venture

in India.

What was Umax’s growth since it started business in India?



When we started business in India in 1996, our marketshare was just around

20 percent with HP having around 70 to 80 percent in the scanner market. By

1997-98 we were very strong with over 50 percent marketshare. In 1999, it

dropped to 40 percent with many competing products coming in. This continued

till 2000 and last year it dropped further. Now it should be around 10 percent.

	In this overly- competitive environment, I am confident that we can garner 30 to 35 percent marketshare
George Tsai, Assistant VP, Sales Division, Umax Data Systems Inc

What was the main reason for losing marketshare so drastically?



We faced a very unique problem in one of our very famous model, the 2000P

scanner. To solve this problem we invested a lot of money. I am sure our

competition also must have had this problem because the same technology and grid

are used. Only they are not openly disclosing this problem. The problem could

have happened because of the high dust content in India. We did not have this

problem anywhere else in the world for the same model.

So how do you plan to regain your lost marketshare?



We have totally solved the problem and have introduced newer models. We will

be launching the 2400 dpi, USB2 interface scanner, Astra6700, and two new

digital cameras Astrapix 425 and Astrapix 430 by next month.

In the last two months I have seen sales picking up in large quantities. Many

brands like Canon, Epson, Benq and Microtek entered the market in 2000-01 and

they are getting very aggressive. However, in this overly-competitive

environment, I am confident that we can garner around 30 to 35 percent

marketshare which is good enough. Scanners are our core business and the second

segment which we are keenly looking at is digital cameras.

What kind of service network do you have in place for scanners?



Neoteric Infomatique, our sole distributor, has been very efficiently

handling all service issues so far. But we intend to appoint third-party service

partners throughout India very soon. We think service is a very important factor

in India. The company is making all efforts to get the customer´s confidence.

We are also considering setting up of an office by the first half of next year.

Will it be a liaison office or a full-fledged office?



It will most probably be a joint venture and we are looking for the right

partner.

Have you identified the partner?



We would not like to divulge this information at the moment.

There were rumors in the market that Umax is closing down. What could have

been the reason behind such rumors?



We don’t know who spread these rumors. It could be our competitors or some

disgruntled customer or it could have been sparked because of the bad year we

had.

What are your promotional plans for the current fiscal?



Neoteric has been regular with their schemes for partners where they reward

performing partners. Recently they have appointed 160 star partners and 50 power

partners across India to sell Umax products.

In its latest offer to partners, Neoteric has provided a test drive option,

where partners are given a free demo of the product they deal in. Neoteric also

provides a free scanner for demonstration purpose. And various incentive-based

schemes are run on a monthly and quarterly basis.

What is your pricing strategy vis-a-vis competition?



We have a very good brand name all over the world and in India. Why should

we position our products at a lower price? I don’t think that is a good

marketing strategy. If you keep up the good quality and people will buy your

products.

With expanding product lines, does Umax have any plans to add more

distributors?



As of now we are waiting and watching. I believe Neoteric is a very good IT

distribution company. As we go into high-end digital camera market, we might

look for a channel to look after that business segment. But as of now, we are

happy with Neoteric and would keep it as our exclusive distributor.

How are your competitors performing in the scanner business?



I feel HP is going down but Canon is quite strong. Canon has been investing

lot of money not only in India, but everywhere else.

With multifunctional devices (MFD) that also can scan catching up, what

will be future of scanners?



Yes, MFDs are going to become popular and there is no doubt about it. It is

a good space saver. But the price is still very high for such devices. Besides,

in such devices there is always a risk that if one function goes bad, you are

unable to use the remaining functions.

It is also dependent on the user’s requirement. An MFD trying to do the job

of a scanner will not be up to the mark. Scanners will continue to be in demand.

I don’t think popularity of MFDs will result in a drop of demand for scanners.

As of now, the cost is also very high for MFDs. Only the small office segment

can think of going for a MFD provided the cost comes down.

What are the major problems that scanners face?



Problems that scanners could face are lamps going bad or dust accumulating

on the lens or mirrors, which is taken care of in our future models. But all

this depends on the usage and the model.

If a user has brought an entry-level model and if it is utilized like a

professional model, then the chances of the scanner getting spoilt is more. But

we are very confident that the newer models that we have introduced lately are

very reliable and possibilities of a failure is miniscule. The total failure

rate is around 0.5 percent.

How big do you think is the Indian scanner market?



In units terms it should be around 9,000 units per month.

NELSON JOHNY, in Mumbai