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 Suresh Pansari, Managing Director, Rashi Peripherals, opines that old practices coupled with judicious application of current management strategies enabled the IT industry to survive the slowdown
The year that just left us saw improvements in the IT market, but we all wish it could have been better. Though 2009 started off on a slow footing, the IT channel managed to grow, learning a few lessons in the process.
The economic slowdown, coupled with terror and security concerns, did affect the Indian IT industry partly, but not to the extent it affected the western market. Overall, we have seen stable growth during the year.
The drop in demand for hardware did see stock pile up in the channels during the initial phase of 2009, but most of it has now cleared with the festive season bringing in the much needed cheer and boost to the business in India.
Year of rationalization
I would term 2009 as a year of rationalization with the entire IT community acting sensibly and practically. It was a time when old business practices coupled with judicious application of current management strategies enabled entities to survive the great economic slowdown. It was really the survival of the fittest, so here we are, the IT fraternity, braving all odds of survival and growth.
Now, at the beginning of the new year, we are carrying quite a few learnings in our kitty to survive and grow in 2010, the key one being the importance of working together as part of the supply chain. Growth and survival are possible only if we work together and in tandem with each other’s policies.
Secondly, it has become crucial to identify and understand the pulse of the customer’s likes and dislikes so as to market the right products. The reduced purchasing power has limited the choices of the end-consumer, hence he will go for a product that will be reasonable in price and high on value.
What’s ahead?
Moving forward, the IT industry will be in an upbeat mode, but we will have to collectively work toward leading the industry out of the depths it was feared to be lost in. Going by current trends, the market is projected to grow in 2010. Economic and market sentiments are high and positive about the year.
In this growth phase, we will be offered exemplary innovations and technologies, but the onus will lie upon us to take informed decisions. Appropriate decisions will pave the way and give right direction to our growth strategies.
To achieve this and to take informed decisions, we have to change the way we look at our business and the way we create prospects for our business. Everyone will strive to get the best return on income from their investment. But that is possible only if we react properly to the demands of the customers and supply goods that are high on value and quality.
Another factor will be the growing demand from the semi-urban and rural sector for IT goods and services. We see a huge surge in demand for branded goods, changing the traditional pattern of IT consumption.
Mobile computing products, especially netbooks, will be in great demand, along with conventional notebooks which dominate the PC market. The PSU, government, defense, education and banking sectors will continue to fuel the demand for IT products.
The retail sector will grow, but maximum selling will happen through the channels. Retail will fuel the demand for lifestyle products such as touchscreen-enabled all-in-one-desktop (AIO) PCs, whereas traditional channels will continue to hold fort for major product lines.
We will see the IT industry returning to growth in 2010, but it’s going to take some time for the market to match the revenues and rate of growth of 2007-08. The year will be all about balancing the focus on cost, risk and growth, with emerging and untouched regions fueling growth.
Awaiting GST
The Goods and Services Tax (GST) will mark a transition from the existing origin-based taxation regime to a destination-based one, and remove the problem of tax cascading by moving to a common tax base. It will be full of challenges and opportunities in terms of the impact it could have on supply chains. The proposed income-tax regime will give more purchasing power to end-users; this will trigger sales for all industries.
| Takeaways for 2010 |
- The end-consumer will go for a product that is reasonable in price and high on value
- There will be growing demand from the semi-urban and rural sector for IT goods and services
- There will be a huge surge in the demand for branded goods
- Retail will fuel the demand for lifestyle products
- Distributors and partners should focus on quality add-ons
- The proposed income-tax regime will give more purchasing power to end-users
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Plans for the year
The increase in the age of hardware, due to non-replacements in 2008-09 due to the cash crunch, will impact buying decisions in 2010 because it will put pressure on CIOs to replace and repair existing infrastructure. This will trigger demand for enterprise IT products. Further, a lot of buying plans which were put off at end-customer levels during the slowdown can be seen materializing into actual purchase.
Channel trends
Year 2010 will be a good time to consolidate and build on the consumer and enterprise segments. This is a year for distributors and partners to focus on quality add-ons and concentrate on an in-depth understanding of what the end-customer wants.
Both distributors and partners will have to constantly update and brace themselves for the onslaught of newer innovations and technologies. Both parties in the supply chain will have to plan things in advance, taking into consideration market dynamics. The need to take informed and well-thought-over decisions will be greater than ever. |