By Ramdas S, CRN Network, September 28, 2010, 1200 hrs
HP’s PSG team has made claims that their business in Kerala has doubled within the first few weeks of implementing the new policy, and their notebook numbers grew year-on-year by 96 percent for the festive season of Onam. According to the management, the growth is sign that partners have accepted the vendor’s new channel policy.
Following a 45 day boycott of HP products from a majority of partners in Kerala affiliated to the channel association AKITDA, HP had—after removing its telco partners DC Johar & Sons and Shree Ayyappa Agencies—appointed Kochi based Noveon Systems as an RD.
“We have had a successful first month as an RD. According to the HP management, the RDs and HP retail outlets, have sold almost double the numbers compared to the business done during the last Onam season,” claimed Jaimon Joseph, Director, Noveon Systems.
Earlier in September, HP sent out an EDM campaign, which claimed a growth of 96 percent over last year’s, thanking partners in Kerala. However, HP management did not want to clarify the numbers sold, or the exact month for which the numbers were projected. This was pointed by partners of both Acer and Dell.
Some of the partners attribute the growth in numbers to aggressive schemes that HP ran for both tier-3 resellers and end-users.
“Under a scheme, extended till September 20, we offered a free digital camera worth `5,500 on both HP notebooks and netbooks. This brought in a lot of footfalls for our retail partners,” offered Joseph. “We also ran a scheme for tier-3 partner. According to the scheme, all registered partners who manage to do a business of 250 PCs would win a Tata Nano car; and those who achieved target of 350, would bag a Hyundai Santro. We expect that at least of 10 our tier-3 partners will win cars.”
While not confirming the exact sales growth, Sunil Dutt, Vice President, HP PSG, said, “The biggest problem a retail partner faces today is the lack of uniformity in transfer prices, and to get the best price he needs to contact multiple sources, or work backwards on schemes and do upfront discounting. Partners end up spending a lot of their time and energies in figuring out their right transfer costs, and are not able to focus on the business.”
He added, “Post the new policy implementation, our tier-3 partners from Kerala and other parts of the country informed us that they see their profits soaring. The growth is proof that the new channel policy is beneficial to channel partners.”
Shyju Antony, CEO, Online IT Shoppe Kochi, one of the largest IT retailers in Kerala, said, “Prior to the implementation of the new policy, I had to cross-check with at least two sub distributors and two distributors to ensure that the best price of the day on the model before quoting it to the customer. Streamlining the process at tier-1 and tier-2 definitely saves us the trouble. As of today, MOP looks stable. This is good for an end-user facing partner like us.”
K Balachandran, Proprietor, Southern Associates, who owns five retail outlets in and around Thrissur, said, “Earlier we used to make between `50 and `200 on a laptop. Now the margins are better, and we make more than `500. Competition between retailers has also reduced. We have sold close to 300 laptops and 200 desktops during the Onam season, and hope to win one of the cars on the offer. We are happy with the new policy.”
Noveon Systems’ Joseph claimed that HP sold over 4,000 laptops during the Onam season in Kerala.
However, not everyone is quite convinced about HP’s claims. "To the best of our knowledge, none of the others brands have lost any market or mind share. Dell and Acer both have reported their best months for a long time. Even Lenovo, Sony and Toshiba have done well. The laptop market is estimated to be less than 5,000 numbers a month in Kerala. Where did HP sell these numbers?" asked Sampath Kumar of Positive Systems. |