|
Guntur, Andhra Pradesh
Guntur, located in southern Andhra Pradesh, and well known for its cotton, tobacco and chilly markets, is transforming itself from an agro-based economy into a transport and textile hub. The city’s strategic location has aided this transformation—it is located near the two largest cities of Andhra Pradesh—Hyderabad and Vijayawada.
Channel Scenario
Guntur market has a small channel community comprising of 45 active resellers selling an average 500 PCs per month. Notebooks account for about 60 percent, while the rest are desktops. Guntur has a large number of system builders as 75 percent of the desktops sold are assembled.
Till date, the city has no association, although there have been numerous attempts at forming one.
Opportunities
Traditionally, the government sector and corporates are the largest IT spenders, followed by home and SOHO segment accounting for nearly 60 percent of the total demand. Guntur has a large number of blue chip companies like Andhra Fertilizers, Hindustan Zinc, and ITC, and also boasts of some leading jute and granite manufacturers. On the government front, several state economic development departments are present in the city driving up IT demand.
The buoyancy of the local GDP has led to increased consumer, SOHO and SMB demand over the past two years. The home IT products in particular have been growing at over 80 percent every year.
Guntur is also faster than its peers in adopting new technologies. According to partners, two products namely LCD monitors and multi-function printers have seen the fastest growth during the last year.
“LCD monitors have shown more than 100 percent growth. Out of 100 desktops sold, about 80 are sold with flat panels and among them, 17-inch wide screens are the most in demand,” says Bharat Siruveni, Managing Director, Raj Electricals, a leading sub-distributor here.
Laser MFPs have found major acceptance among traders and small businesses, thanks largely to its falling prices.
Gaming is another segment that has caught the fancy of consumers in Guntur. High-end gaming PCs are in vogue among a large number of home users and the sales of gaming consoles like Xbox and Play Station is also on the rise. “This has opened new vistas for business mainly for gaming peripherals, high-end display and computers,” says Sandeep Agrawal of Peripherals India, a company focused on computer peripherals and accessories.
Wi-Fi solutions are also growing in demand not just among large manufacturing firms but even small business and homes.
Challenges
The buoyant IT market in Guntur has meant an influx of large sub-distributors from Hyderabad and Vijayawada to open branches leading to intense competition and thus eroding the margins of local players. “The larger players from Hyderabad have bigger volumes and can offer lower prices. This has created a dent in our revenues and margins,” complains Agrawal.
Partner Profile
Sandeep Agrawal
CEO,
Peripherals India
Banking on peripherals
A Diploma holder in Computer Appli-cations, Agrawal started his career as an entrepreneur selling IT products. “Though I hail from a middle-class background wherein my father works as an engineer for a public sector company, I always dreamt of making it big. After completing my studies, I decided to start my own firm. As a computer literate individual, selling IT products was the best option,” says Sandeep Agrawal.
In 1996, Agrawal opened his store and christened it Peripherals India. “I used to subscribe to an IT magazine published in Mumbai. I picked this name from one of the articles in the magazine,” explains Agrawal.
Company Snapshot | | Company | Peripherals India | | CEO | Sandeep Agrawal | | Year of Inception | 1996 | | Brands | Dell, Lenovo, HCL, Intel, Seagate, Samsung, Intex, D-Link, Netgear | Primary Business | Reseller | | Employees | 6 | Turnover | Rs. 1 Crore |
He started with Vintron as his principal vendor. “When I started my business in Guntur, there were only 3 resellers in the city including me, while presently there are more than 45 resellers,” he recalls.
Today, Agrawal boasts of a strong base of 500 customers, of which 35 percent have been buying from him for the last five years. “Our main strength is customer retention and for this, quality of services play an important role. Nearly half of our revenues come from repeat customers,” says a proud Agrawal.
Peripherals India has seen many ups and downs. The company faced its biggest loss in 2000, while it was aggressively bidding for government tenders. “Two of our clients, a government department and an educational institute, delayed their payment by almost a year. This completely disturbed our working capital cycle resulting in a loss of Rs 4-5 lakh. It took years to overcome the loss,” recalls Agrawal.
Thereafter, Peripherals India played safely; it reduced the business from contracts and focused on home and SOHO segment. Currently, more than 40 percent of his business comes from this segment, while the rest comes from education, corporate and government segment.
The company also added more brands like Zippy, Dell and Netgear to its product portfolio as they offer more margins. In the near future, Agrawal plans to open another store in the city in order to tap the home segment.
Agrawal devotes substantial time to playing cricket and chess. An ardent fan of Bollywood, he is a proudly claims to have a collection of over 10,000 Hindi film songs including several from very old movies in 50s and 60s. |