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In the last three years, Supertron has transformed from a regional distributor to a strong national player. VK Bhandari, Chairman, Supertron Electronics, talks about the company’s successful transition and shares performance highlights and future strategies with Dhaval Valia
Supertron has consistently been in the news over the last 12 months singing up new brands and products. Explain in brief the various vendor tie-ups.
The last 12 months have seen the addition of some large brands to our portfolio. Starting with Dell who we signed up in August 2008 for its range of PCs and LCD monitors.
We recently partnered with Acer to exclusively distribute its new economy brand called eMachine. This is in addition to the Acer brand that we have been distributing for past several years. Just last month, we were appointed as the national distributor for BitDefender.
We expect these new brands to significantly increase our topline and bottomline in the next 12 months.
On the home front, we have augmented our value brand Supercomp with several new peripheral products. Also, the launch of Solitaire as a premium brand—a part of our dual brand strategy—has helped us garner more market share.
What is the overall growth you have witnessed?
Thanks to the new product lines and geographical expansion, we have grown from Rs 479 crore in FY 2007-08 to Rs 611 crore in FY 2008-09.
Our projection for this fiscal is to grow to Rs 850 crore, despite the slowdown. In a short period, Supertron has made an aggressive transition from a regional to national distributor. However, your peers made this transition long before you did.
Why were you so late in adopting the national distribution model?
It’s a combination of several factors. First of all we are based in Kolkata which is a much smaller market than Mumbai and Delhi.
For distributors based in Mumbai, it is easier to ship larger quantities as 40 percent of the market is in Mumbai. But in Kolkata, only 10 percent of the shipment sells within the city. And for the other 90 percent you have to work hard to develop new markets and channels.
Also, sometimes, operating from a smaller market like Kolkata you tend to become conservative.
So when did you finally realize that you had to make the national push?
It happened about three years ago when we decided to play a larger role in distribution. We realized that our regional presence wasn’t doing full justice to our expertise and brand equity. So we sat down to analyze what it will take to go national. We needed wider market coverage, create proper systems, and get a bigger and better team.
We put systems in place by investing in an ERP system in 2006, and hired a team of professionals who can drive expansion and business growth.
With the right focus and strategy, we have carved our place in the national distribution space in a short span of three years. Today, we are at par with other tier-2 distributors who began national distribution much before us.
However your branch presence is still not as wide as your peers. What are the plans for increasing the coverage?
We are slowly and steadily increasing our branch presence. Last year we strengthened our presence in North and West by opening seven new branches in cities like Chandigarh, Ludhiana, Ghaziabad, Faridabad, Vadodara, Surat and Nasik. Presently, we have 26 branches.
This year we plan to open a branch in Varanasi and further strengthen our presence in South India. We have identified Raipur, Hubballi, Vijayawada, Coimbatore and Thiruvananthapuram as new branch locations. All these branches will be full-fledged offices with sales and support infrastructure. We plan to have billing facility at more locations.
What new products do you plan to add this year?
Printer is one product category we lack in our otherwise complete portfolio. However, our focus presently is not to add new products or brands, but rather to consolidate our current portfolio and focus on growing the products that we have added over the past 12 months. Although, if the right partnership opportunity arises, we will make the most of it.
What is your outlook for the Indian market for the next 12 months?
Surely the Indian economy has bottomed out. We have seen demand return since the last quarter. Month on month our volumes are growing after a sudden slowdown in OND 2008. Having said that, I must also add that this year, and probably the next year, we will see slow rate of growth as compared to what we witnessed in the past four to five years.
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