Role Model
Doctor to distributor
 Kishore Jeswani, Director, Pacific Infotech believes that in order to be successful one should focus on doing something that one loves
CRN Network
Born and brought up in Mumbai, Kishore Jeswani completed his bachelor’s degree in Pharmacy and was ready to enroll for an MBBS course. But his love for technology had him turn towards IT instead.
After observing the business for a few months, Jeswani set up Pacific Infotech in 1993 in Mumbai’s Fort area to resell dot matrix printers (DMP). Like any start up, beginning was tough. “IT was an unorganized industry. There were no policies and terms set. Sourcing material was more difficult than finding customers,” he reminisces. So harsh were the first six months that Jeswani contemplated quitting after discovering that several DMPs purchased were defective and irreparable. It was a big blow. Yet, it turned out to be a blessing in disguise as his family rallied around him—especially his brothers and father.
Bolstered by their support, Jeswani soon got a hang of business and partnered with OEMs like Zenith, PCL and CMS. “In those days, there were a scanty few who supplied materials to resellers in western India. I saw that as a good opportunity. The business offered good profit margin. They offered advance payments, so there was no cash block either.”
Inspired by the founder of Cassette World—one of the oldest computer peripherals retailer at Lamington Road, Mumbai—in 1995, Jeswani got his brothers Ashok, Sunil and cousin Haresh Motiani on board and started a retail outlet at Lamington Road to increase business breadth.
While distribution still contributes maximum to the revenue (78 percent), Pacific is keen on its retail business. It currently has three showrooms: an authorized Sony showroom in Lamington Road and a multi-brand showroom in Thane—both set up in 2005, and an exclusive HP-Compaq showroom inaugurated in 2002 in Kalyan (town located on the outskirts of Mumbai).
Current business
Pacific has grown steadily, registering Rs 161 crore in turnover in FY2009-10. In FY2008-09, despite the global economic downturn, it totaled in Rs 96 crore in revenues.
“When business started slowing down during the downturn, we spent time analyzing the situation and making the necessary correction,” Jeswani elucidates. Taking a cue from sub-distributors (SDs) for geographies like Asia-Pacific, Middle East and US, in 2009 Pacific decided to cut costs and increased business in other verticals—especially security and storage. The company also began dealing in smart cards and bar code stickers.
Till then, the SD’s focus was only on desktop PCs. But gauging the market, Jeswani shifted the thrust towards laptops. Pacific then tied-up with Sony India for their Vaio business. That strategy paid off. Currently, in terms of sub-distribution revenue mix, notebooks contribute 52 percent to the revenue.
Peripherals bring in 36 percent, desktops add 5 percent, and the rest of the business comes from PC accessories, components, software, server, networking, storage, antivirus, mobile phones and services.
Pacific currently sub-distributes LG, Acer, Sony, Epson, Intex, Moser Baer, Benq, Lenovo, Microtek, Tata Sky and Zebra products.
“In today’s competitive times, vendors and resellers are looking out for SDs that offer them options. So, if we are not adding value then our chances of doing better business are slim,” he says.
The SD recently added broadcasting (AV) components to its product line. It is focused on getting peripherals, accessories and low cost PC vendor Intex on board. “It will be win-win situation for both,” Jeswani adds.
Challenges and opportunities
According to Jeswani, there are several challenges facing SDs today. “Assembled market is shrinking and so are the desktop sales. With branded product there is an immense pressure on the margin. In order to tackle the pressure we offer a complete mix. We bundle desktops, laptops, servers, storage, peripherals and accessories, so as to do bigger business and dissipate the pressure.”
While IT SDs are still seeking clarifications on GST and its implications, Jeswani is sure that the organized tax structure will be beneficial for the long-term players. It is this optimism that has him planning an expansion in the distribution business. “Volumes are going to increase. The only challenge is to manage our expenses, both Opex and Capex, against our margins.”
In 2008, Pacific decided to cover other geographies and established a presence in Uttar Pradesh and Kolkata with the help of carry and forward agents. The SD now plans to test waters in the south and also setup a retail presence in Bengaluru soon.
Speaking about the challenges in the retail business, Jeswani offers, “The main challenge is competition from LFRs. Most IT retailers have seen about 30 percent dip in their business thanks to them. To tackle it, we plan to upgrade our showrooms and move to branded products only.”
Systems and processes
In order to do a profitable business, Jeswani believes that vigilance is the key. “For better inventory management, we have FIFO (first-in-first out) system in place and focus on ageing products and analysis of order cancellation. We put our foot down when vendors insist on dumping their material at month-end to achieve their targets.”
The SD is also in the process of deploying ERP system to give more secure and fast access to resellers and vendors.
Pacific ensures tight control on credit management systems. In addition to analyzing reports, the SD does a through background check before offering credit to new partners. “We don’t do any business transaction without post-dated cheques in hand. We offer credit limit to partners who are minimum one-year-old in this industry, and have a good credit history,” he adds.
Jeswani believes that logistics management is the key to business success. “It directly affects our bottomline; more material takes more space, and results in margin pressure and cash flow problems.”
Pacific regularly asks its resellers to rate it on logistics and takes notes from that. It sends SMSes to keep the resellers informed. “Even if the margins don’t permit, we still strive to offer a prompt door delivery. It is a value-add service that has endeared us with partners,” Jeswani informs. The SD is currently working on online order booking system through their B2B website to save time and ensure more clarity in the transactions.
Pacific often acts as an intermediary between the vendors’ service centre and resellers. “We give our staff and channel partners through product training and organize on-line trainings if face-to-face are not possible. We are serious about profitability of our partners,” he adds.
Future safe
According to Jeswani, there will be no more layers possible in distribution business and hence Pacific will focus on deeper penetration and breadth of products. It is planning to enhance its online presence and go direct to consumers. It has started business solution division, which is focused on upcoming segments like audio and videoconferencing, servers and storage. The SD has also assigned special teams to handle their leading sectors like corporate and education.
Pacific plans to ensure that the current 91 employees are kept happy. “Some of older team members have been real heroes in the Pacific’s success story and we will soon be offering them more responsible positions,” he says.
Jeswani is hopeful that in the next five years the company will achieve a four-digit turnover.
Getting personal
Inspired by Hero Honda’s Munjal family, Jeswani says, “The way they have taken their automobile business to greater heights is an inspiration for me and my family.”
A family man to the core, Jeswani counts his family as his biggest blessing. He credits his wife Roma as his main support. “She completely handles home and our two children so that I can focus on business.” His elder brother Ashok handles finances and administration at Pacific, while younger brother Sunil handles the power-related business. Even his father, at the age of 71, helps out by handling Pacific’s HP-Compaq showroom.
An adventurer at heart, Jeswani’s dream holidays include destinations like Maldives, Lakshadweep, South Africa and Hawaii. “I love to discover the vegetarian delicacies of other countries. It’s an adventure in itself,” he chuckles.
Jeswani considers his team at Pacific as his extended family. While signing off, he adds, “You have to be a part of your teams’ happiness and sorrows. Never take them for granted. As far as your business dealings go, you can’t be rigid. Always be open to changes and make a connection with people who you do business with.”
A sage advice indeed! |