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Srinagar, Jammu & Kashmir
Srinagar is located in the heart of the Kashmir valley at an altitude of 1,730 metres above sea level, and is spread on both sides of the river Jhelum.
When it comes to the IT channel business, Srinagar has traditionally been the last region to receive the sunshine of growth in North India. PC penetration is pretty low. 90 percent of the market is for new PCs, the rest for second-hand PCs. Various factors are responsible for the lukewarm growth of IT in this region. The absence of large industrial and corporate set-ups, the lack of infrastructure, and terrorism have all contributed toward IT business’ slow growth.
Yet IT awareness among the general public is slowly picking up. Very few schools and degree colleges have a PC in place, and there is scarcity of trained computer teachers.
800 PCs are sold here every month. All national distributors like Redington, Ingram, Rashi, Neoteric and SES have their logistics and sales offices in Jammu. Most of their stocking operation is controlled from Chandigarh and Delhi, so stock is a big problem for regional distributors, explained Ashraf Zandhari, owner of YB Associates.
But no one is willing to ignore the business potential that exists here. “With the market in metros and bigger cities slowly getting saturated and over-competitive, partners have to look at markets like Srinagar where more than 100 resellers operate, out of which 15-20 are registered resellers.
Another feature which differentiates the market from others is that it is largely driven by the defense and government sector. “Nearly 45 percent of the business in Srinagar comes from the defense segment, with home users contributing the second highest,” said Aejaz Bhatt, owner of Cyber Citi.
The IT market here is fairly small, but its potential is promising. In the absence of any IT association, resellers worry only about their own benefits. Zandhari complains: “There is absolutely no one in the market to come forward and initiate the formation of an association.”
But Srinagar’s IT players may soon have an association since one is at its initial stage of formation. Presently it has been given a tentative name, ‘Kashmir Information Technologies Vendors Association.’ “We are still contemplating the name. We are assured that in the next three months our association will be running,” says Gowhar Maqbool, a founder member of the association.
According to him, the poor state of Internet connectivity and network problems are causing problems for businesses. The inadequate BSNL Internet and network connectivity is said to be the main cause of all delays. For example, in Srinagar there is no toll-free number for BSNL service. Dealers are waiting for some private service provider to come to Srinagar.
Once the association will start operating, channel players plan to ask all new vendors and national distributors to set up their offices in Srinagar; this will control the transportation costs and logistics delays.
Maqbool says that HP recently opened its service center here, and a few new small distributors have started migrating from Jammu to Srinagar.
Partner Profile
Aejaz Bhatt,
Owner,
Cyber Citi,
Srinagar
“Exclusivity always pays in the long term”
Aejaz Bhatt, owner of Cyber Citi, has been a veteran channel partner in Srinagar. After dropping the HP dealership last year and becoming an exclusive Lenovo retail partner in the city, he is making the Lenovo brand and its products popular here. “Ever since we have added Lenovo distribution to our product kitty we have kept ourselves away from the crowd,” he comments. “In Srinagar Lenovo has three exclusive channel partners, and we are among the key players.”
“Being located in Lal Chowk, the hub of Srinagar, our retail business is growing faster compared to that of other dealers in the region. Through our retail outlet we are educating end customers about new hi-end products in the market. There are more than 4-5 big retail outlets already, and more are on the way.”
“In Srinagar, having a multi-branded showroom does not get much attention, and exclusivity always pays in the long term.” The reason for dropping HP from his list, Bhatt says, is because HP has started spoiling the market here by appointing too many partners in the valley. “Though we face lots of service-related issues regarding Lenovo’s laptops, we still manage to sell it.”
The urban population of Srinagar is the key IT buying segment for desktops, laptops, printers and peripherals. Also, the taste for digital devices and mobile handsets is picking up. But the rural area around Srinagar is still not aware of IT products.
In shifting trends, the branded PC business is overtaking the assembled business, and the laptop business is growing fast. Says Bhatt, “In the last quarter we sold 42 Lenovo laptops and 10 desktops in Srinagar, which means the laptop business is growing higher than assembled and branded desktops. Educational institutes and defense organizations are key customers. Recently we installed 10 Lenovo machines at high secondary schools and degree colleges, and we also supply in bulk to the army and railways.
Sharing his future plans Bhatt said, “This year we are trying to reach Rs 60 lakh in turnover. With vendor support we will also display IT products at schools and colleges.” |