Role Model
 Always Blooming
It is his entrepreneurial streak that has helped S Karthikeyan, Managing Director, Bloom Electronics, hunt for opportunities and turn them into profits
Almost two decades ago, an NIIT student made a decision to let go of a cushy job with one of India’s top IT conglomerate and jump right into the world of IT business. A modest start and few risks later, his company has managed to blossom. S Karthikeyan is all raring to talk about efforts of his toil—Bloom Electronics, and his newest pet project aka Project Soul.
Initial years
While pursuing a course at NIIT, Karthikeyan was hired by Wipro during a campus recruitment drive. Barely few months later, he took up a friend’s offer to join his business. And in early 1991, Bloom Electronics made its debut from a 10x10 area in his house. Launched with almost zero investment, the company chanced upon a gap in the consumable reseller market and began selling hardware.
In 1993, Karthikeyan and his friend-cum-partner parted ways owing to differences in their approach to business. “We both began afresh as competitors vying for the same customers.”
Going solo
With partnership gone kaput, Karthikeyan began his solo venture by expanding to network cabling business. Within months of operation, the company won its first major project for Bannari Amman sugar mills worth Rs 1 lakh.
The same year also saw him foray into PC components reselling business when a friend—JG Giridhar—sought his help to buy a PC. Since branded PCs were expensive, they approached an engineer with Zenith Computers to assemble one. While researching for components, he found business opportunity that he could explore—sourcing components and assembling PCs.
“Until 1995, there was no legal route to source PC components. We had to rely on local vendors in markets like Burma Bazaar in Chennai,” he offers. It was a tedious process to source components and hence people hesitated to buy a PC. With help of the engineer, he listed out several components and trusted vendors where he could source them from. Since branded PCs came at an exhorbitant prices, Karthikeyan’s business venture met with success.
By 1995, Bloom had inked a deal with a legal supplier, Triple S Systems. The first supplier to import components when the government announced Export and Import Policy, Triple S System operated from Burma Bazaar. With the hardware business doing well, the company’s turnover in 1998 totaled Rs 20 lakh.
Branching out
In 1998, Karthikeyan, along with Giridhar, set up Sierra offshore development centre (ODC) in partnership with the US-based Sierra Technologies. He invested Rs 3 lakh into the venture—which is an independent entity now—and developed enterprise facility management (e-facility). Meanwhile, he also strengthened Bloom Electronic’s distribution business by signing a deal with Intel.
As the retail market began to boom, Karthikeyan decided to try his luck, and in 1999, Bloom Electronics’ retail showroom opened its doors to customers. “Initially, we were doubtful and didn’t want to go ahead with a big investment. We started with an investment of Rs 1 lakh. To my surprise, we saw a tremendous growth within the first month of operation. So we pumped in more finance (Rs 50,000).”
The retail outlet garnered a growth of 300 percent within the first year of its operation. Today the showroom spans across three floors.
In a legal tangle
“By 2005, we were an established name in the region, and our brand was registered with the Registrar of Trademarks, Chennai. WeP wanted to change its brand to Bloom, but we could not allow it. If we did, we would lose our identity and hard work invested in creating it,” Karthikeyan says. Eventually, Bloom won the battle as WeP withdrew the case.
The year 2006 saw a good start with the company winning one of its biggest software projects—worth Rs 3 crore—from the Civil Aviation authority of Yuganda, for automation of its airport and cargo management.
Business overview
The company registered a turnover of Rs 75 crore during the FY2008-09 against a turnover of Rs 50 crore during previous fiscal. Of this, 60 percent came from distribution, 25 percent from retail, 10 percent from system building and 5 percent from solutions.
Kartikeyan believes that the company’s success has been largely due to its parallel focus on retail and distribution. “We could not get any funding for marketing initiative though our distribution business. This where retail came into the picture. It helped us to get that price advantage. On the other hand, distribution helped our topline and boosted our relations with vendors.”
Last year, the company also tied-up with Dell. It however did mean that they had to lose out on HP as a client. “Owning to HP’s strategic decision, when we signed up with Dell we had to move out of HP’s PC business. They did come back to us three months later, but we had to refuse then. So now we only carry HP’s printer range.”
Signing up with Dell gave further fillip to their business; about 30 percent of the business comes from Dell. With a network of 500 resellers, Bloom has worked with 25,000 customers so far.
Different strokes
Over the years, Karthikeyan has devised some good marketing initiatives to help his business. “In 1997—when internet services launched in India—we wanted to create an awareness in the market as a company in the IT space. We organized a paid seminar on internet services. Since then, we orchestrate a road show every year.”
Yet another novel idea that he implemented in 2000 in the Coimbatore market was of a CD library. “Any customer who bought a PC and signed up the service contract got an access to our CD library. This library consisted of over 1000 gaming and encyclopedia CDs. And our customers could avail this service at no extra cost. This initiative brought in lot of business.” He also introduced 24-hour tele-support as another value-add service across Coimbatore market.
In 2002, Karthikeyan was pivotal in launching yet another innovative marketing idea—the 7 o’clock show. The idea was to get all the customers together at one time and brief them on the products. “Usually customers feel more confident interacting with the head rather than a sales person. Since movies are the only source of entertainment here, we borrowed this idea and at 7 in the evening we began screening a CD on how PCs can be useful,” he informs.
The idea became such hit in the market that Intel took it across the country to its other partners as an innovative marketing initiative.
Karthikeyan added one more chapter to this strategy with 8’o clock show and this time approached customers through local TV channel. During the one hour show, customers could call up and put forth their technical queries.
Next step
Karthikeyan has now set his eyes on establishing Bloom Electronics as a Rs 100 crore company over the next two years. He will be evaluating the option of managed services and will expand Bloom’s portfolio with the inclusion of Wi-Fi products. “The idea would be to partner with the right kind of vendors and offer right products. Our vision over the next five years is to become a Rs 300 crore company and the first step towards it will be to reach the Rs 100 crore mark.”
Community man
All these years he had been a true workaholic, but now Karthikeyan has decided to take it easy. “I have been working everyday for 12 hours and half day on Sundays. Now I want to balance work and my professional life. This year onwards, I have decided to give my Sundays to family. I want to go and visit my sister in the US and take that much needed break.”
“Art of living and yoga have always interested me. With kind of professional life I have, they provide immense strength to deal with the day-to-day work stress,” he offers.
In a bid to give back to the channel community, he has conceived the Soul Project. Instituted for the welfare of members of Confed-ITA—this project will ensure that for every purchase of Rs 100 from tier-1 distributor, the member will contribution 10 paisa to the fund. In addition, the members will contribute a small percentage of their turnover towards building a corpus which will be used for channel members’ welfare.
“I would love to see this project become a success.
It is my dream to be of some help to my peers,” he concludes. |