Best Advance Sub Distributor - North
Elcom Trading, New Delhi
Elcom Trading posted a topline of Rs 110 crore in FY 2007-08 registering more than 35 percent growth over the previous year’s turnover of Rs 80 crore. While 80 percent of the revenue came from sub-distribution, the remaining 20 percent came from a combination of retail, system building and corporate sales.
“Last fiscal we grew on the back of three main reasons—addition of new PC brands; further expansion into the UP market and growth in our retail business,” says Somesh Narang, MD, Elcom Trading.
Elcom signed up with Lenovo as a sub-distributor for both commercial and consumer PCs; IBM for Intel-based servers and added Toshiba consumer notebooks to the portfolio.
Last year, the company expanded its reach in UP through a network of C&F agents. “While we have a branch office in Noida to cater to the vast UP market, to achieve wider market coverage we decided to appoint C&F agents. We appointed agents because the rise in real estate cost and rentals made it impossible to open new branches and the model has worked well for us,” informed Narang.
Presently, Elcom has three branches in Delhi, one in
Performance Highlights | - Added Lenovo, IBM Intel servers and Toshiba consumer notebooks
- Opened a large retail showroom at Nehru Place
- Appointed C&F agents to penetrate UP market
- Consolidated channel network for better credit management
| Company Snapshot | Company: Elcom Trading
CEO: Somesh Narang
Year of Inception: 1992
Turnover 2007-08: Rs 110 crore
Turnover 2006-07: Rs 80 crore
Employees: 45
Certified employees: 9
Principals: Intel, LG, Lenovo, Toshiba, Seagate |
Noida, and 13 C&F agents. Retail became the new focus area for the company as it launched a large showroom at Delhi’s Nehru Place. “In the first year itself we have done well in retail and plan to open one more store soon,” said Narang.
Last year, the company consolidated its reseller network. “We have become more cautious in offering credit to all resellers. We have decided to work with a smaller base of credit-worthy partners and only added 75 new partners during last year. “We have been in the business for 16 years and understand by now whom to provide credit and how much to expose. We are cautious and we will increase our portfolio to sell more to partners who deserve credit. The strategy has served well as its improved our cash flows and also provided us a stronger connect with these select partners,” informed Narang.
Intel recently appointed Elcom as one of the Intel Channel Suppliers for demonstrating consistent performance and loyalty.
“Inspite of being in the business for so many years, we are a conservative company. We are more bottomline focused than topline,” concluded Narang.
Best Advance Sub Distributor - East
Lalani Infotech, Kolkata
Lalani Infotech saw its revenues grow by 25 percent from Rs 80 crores in FY 2006-07 to around Rs 100 crore in FY 2007-08.
Performance Highlights | - Launched own brand of IT and office automation products under the Kanry brand
- Made a huge investment in creating a 40 member technical support team for Kanry brand
- Added Linksys, HP, Dell and Lenovo PCs
- Set up branch in Raipur and Mumbai
- Conducted a major credit rating exercise to weed out partners who were not timely with their payments
| Company Snapshot | Company: Lalani Infotech
CEO: Umang Lalani
Year of Inception: 1978
Turnover 2007-08: Rs 100 crore
Turnover 2006-07: Rs 80 crore
Employees: 120
Certified employees: 2
Principals: Linksys, HP, Lenovo, Canon, Microsoft, Panasonic |
The Kolkata-based sub-distributor added many products to its portfolio including Linksys, HP, Dell and Lenovo PCs and its own brand of IT and office automation devices.
Under the Kanry brand, Lalani launched a wide range of products starting from mice, keyboards, webcams, UPS, pen drives to specialty office products like document laminator, paper shredder, currency counting machine and fake note detector.
“The primary reason to enter with our own IT products was to have full control on availability and pricing of products. We were frustrated with the growing demands and shrinking margins of MNC brands,” opined Umang Lalani, Director, Lalani Infotech.
Explaining the move into specialty office automation products, Lalani said, “Most of the products launched so far have a strong connect with the commercial range of products we sell and hence it made logical sense to sell those products.”
Kanry contributed 10 percent to Lalani Infotech’s revenue last year.
In 2007, it set up two branches in Mumbai and Raipur in addition to its existing branches in Guwahati, Bhubaneswar and Ranchi. The sub-distributor added 200 new resellers mostly in smaller cities.
“Last year we also made a huge investment in creating a 40 member technical support team for Kanry brand. The same team is also supporting IT products and this has given us an edge over competition,” claimed Lalani.
The company also embarked on a major credit rating process. “The only way to grow and enhance profit in our business is to ensure faster inventory and stronger credit management. The credit rating exercise helped us weed out partners who were not timely with their payments and didn’t have proper record. Thus, we were able to unblock our working capital and invest in partners who are worthy,” said Lalani.
Plans for the current fiscal include launching more products under the Kanry brand and signing up more partners for the same. The company plans to open branches in South India. “Further, we will strengthen our support infrastructure and aim to garner more service revenue. On the IT side of the business we will add more commercial products to the portfolio,” said Lalani.
Best Advance Sub Distributor - West
Data Care Corporation, Pune
Operating from Pune with a single branch, Data Care Corporation notched up a turnover of Rs 175 crore in FY 2007-08, up from Rs 140 crore that it had posted in the previous fiscal.
Performance Highlights | - Appointed regional distributor of Dell and TCL
- Activated 375 new resellers mostly in rural markets
- Launched standard-pricing post-warranty AMC and repair services
- Deployed SAP B1 and HR payroll system
| Company Snapshot | Company: Data Care Corporation
CEO: Anil Mhaske
Year of Inception: 1991
Turnover 2007-08: Rs 175 crore
Turnover 2006-07: Rs 140 crore
Employees: 110
Certified employees: 18
Principals: Intel, AMD, LG, Sony, HP, Seagate, Samsung, Dell, Lenovo, IBM, Acer |
The company attributed the growth to the market-penetration strategy it evolved three years back. “In 2005, we had figured that city markets like Pune will saturate. Also, distributors will take up a significant share in these markets as they matured. Hence, we shifted our focus to upcountry markets and this has paid handsome dividends over the past three years where we have cumulatively grown at over 55 percent,” said Anil Mhaske, CEO, Data Care.
Gaining market penetration didn’t just mean activating resellers in smaller cities, but required enabling them to do business. “Banks were not willing to finance smaller resellers in upcountry markets. So initially we provided them credit almost instantaneously without any interest cost added. This helped us activate partners in places where there were none and also created a loyalty factor among them,” explained Mhaske.
Last year alone, the company activated 375 new resellers mostly in upcountry Maharashtra. It has a network of 1500 active resellers across the region. It boosted its product portfolio by becoming Dell’s regional distributor for Maharashtra excluding Mumbai and also became the distributor for Chinese vendor TCL.
“Last year, we also took a plunge into building a strong post-warranty AMC and repair practice at standard and affordable price to customers. Through our reseller network we opened 30 service counters across the region and ran campaigns to popularize our new service offering. We expect services to contribute at least 10 percent to our revenues in the current fiscal and expect it to boost our profitability by a margin,” said Mhaske.
Last fiscal saw Data Care automate its business processes with deployment of SAP B1 with an investment of over Rs 60 lakh. It also deployed the payroll package, Saral Pay.
“So far we have grown organically, but at this size we felt the need for building strong systems and processes. SAP has entirely changed the way we run our business. Not a single order is processed before being punched into the system. It has enhanced our inventory and credit management,” said Mhaske.
Plans for the current fiscal include penetrating the market further and expanding its presence across entire Maharashtra. The company plans to boost its commercial portfolio by adding networking products, primarily Wi-Fi products.
“This year we are also looking at entering retail business by launching a store and if successful it plans to rollout a retail franchise program for channels,” concluded Mhaske.
Best Advance Sub Distributor - South
Vishal Peripherals, Hyderabad
Vishal Peripherals from Hyderabad recorded 40 percent growth with revenue of Rs 95 crore in FY 2007-08 over the previous year turnover of Rs 68 crore.
Performance Highlights | - Appointed regional distributor of Dell, Canon and Western Digital last year
- Reduced focus on component business to focus on branded PCs
- Registered as a private limited firm and changed its name to Vishal Computech
- Recently appointed as Intel Channel Supplier
| Company Snapshot | Company: Vishal Peripherals
CEO: Vishal Hisariya
Year of Inception: 2002
Turnover 2007-08: Rs 95 crore
Turnover 2006-07: Rs 68 crore
Employees: 70
Certified employees: 4
Principals: LG, HP, Lenovo, Acer, Seagate, Intel, Canon |
According to Vishal Hisariya, CEO, Vishal Peripherals, the topline growth was driven by increased sales of LCD monitors and the company’s increased focus on branded PCs.
“Till about 2006, we were primarily a component distributor, but sensing deceleration of the white-box market we entered the branded space and this significantly contributed to our growth in FY 2007-08,” said Hisariya.
While components still contribute a significant 50 percent to its turnover, branded desktops and printers contributed a sizeable 40 percent and the remaining came from its own brand of PCs.
Last year, the company was appointed regional distributor of Dell, Canon and Western Digital. It is an LG regional distributor for AP; premier partner of Seagate and sub-distributor of HP, Acer and Lenovo commercial and consumer range.
With a network of 800 resellers across AP, the company has a strong presence in upcountry market and attributes this as a primary reason for its remarkable growth over the last two years.
"All our vendors will tell you that we are the only sub-distribution partner with such reach and market coverage in AP. Last year we split into division--one focusing on Hyderabad and the other division
dedicatedly focused on driving business in smaller cities and towns. This has resulted in market penetration in upcountry locations where our peers don't have a single partner," added Hisariya.
In February 2008, the company registered as as a private limited firm from a proprietorship firm and underwent a name changed toits name to Vishal Computech Pvt. Ltd.
Vishal expects to maintain a sturdy 30 percent growth rate going forward. It has been recently appointed as Intel Channel Supplier. Plans are to add more commercial products including networking, storage and software to the portfolio. It plans to expand its presence in the south by opening offices in Bangalore and Chennai.
"Our aim is to emerge as a distributor of choice for vendors and record a turnover of Rs 200 crore by end of FY 2010. Making the company private limited is a step to becoming more organized. We have big plans on the retail front, especially in upcountry markets," said Hisariya. |