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Indore, Madhya Pradesh
Indore, the largest city and the commercial capital of the central Indian state of Madhya Pradesh, is one of the fastest growing tier-2 cities in India. Companies like Impetus Infotech, Elensoft Technologies, Mphasis, Infobeans, Armour Software, Infosoft Technet, Suvi Infotech, Web Dunia, North South Technologies, Hotwax Media and hundreds of smaller and mid-size companies have come up in the field of software. A Special Economic Zone is planned, to boost software exports. The city has been a hub for the automobile, steel and alloy industry.
Channel Scenario
Indore’s channel community comprises nearly 200 active resellers who sell about 3000 PCs a month. It also has a channel association—Madhya Pradesh Telecom and Computers Traders Association (MPTCTA). The market is growing at 30 percent and is expected to touch 45 percent during the coming festival months.
Opportunities
Indore has a developing IT market and the demand for products is dominated by educational institutions, small and medium enterprises and the home users.
“We have the prestigious IIM (Indian Institute of Management) which has been driving IT adoption in the education segment. Several engineering and management colleges have mushroomed in Indore due to the increasing number of software companies setting up presence. An IIT is also on the cards. This has spurred demand for IT products especially notebooks, Wi-Fi and external storage," says Sumit Gupta, CEO, Ontrack Systems.
SOHOs and SMBs are the biggest buyers of IT products and peripherals. Color printers and scanners are selling well, both with end-users and corporates. “We have seen the demand for IT and office automation products grow at a substantial 30 percent last year, mostly on the back of increasing SMB and home users,” says Abhay Poddar, Proprietor, Netcom Computers. SMB is a segment that is increasingly going wireless. “There are many organizations that want to connect their various branches with the headquarters. It is for this reason that we have seen a growth in the demand for wireless connectivity,” adds Manish Goyal, CEO, Byte Peripherals Systems.
Partners have also noticed a growth in the demand for IT products from the stock broking companies in the city. “Indiainfoline, India Bulls, Religare, Angel Broking and Anandrathi have increased their IT spend over the past few years. The banking and insurance sector has seen sudden growth with new entrants like Yes Bank, Metlife and Reliance Money,” says Poddar.
Challenges
Some of the challenges that the partners in Indore face are of reduction in margins and price undercutting. Smaller resellers who cater to home and SOHO segment have been immensely effected. “Growing competition between partners and increasing cost of manpower and higher interest rates has made it difficult for us to maintain our margins. In these kind of situations, it is only the large distributors who are able to maintain their shops and survive, while small partners are finding it tough and have to shut shop,” laments Goyal.
Partner Profile
Manish Goyal,
CEO,
Byte Peripherals System
Smitten by IT
After obtaining a graduation degree in electronics, Manish Goyal wanted to make it big and did not want to be confined to a 9-to-5 job. He found the lure of IT impossible to resist and thus Byte Peripherals System was conceived in 1997 with Rs 3 lakh as the starting capital. “At that time, IT was one of the most lucrative fields to start your business. I was not interested in working in a simple 9-to-5 job, and that was how my company Byte Peripherals was formed,” recalls Goyal.
Company Snapshot | | Company | Byte Peripherals System | | CEO | Manish Goyal | | Year of Inception | 1997 | | Brands | Lenovo, D-link, Intex, Logitech, Microtek, IBM, Seagate, Acer, HCL | Primary Business | Sub-distributor | | Employees | 20 | Turnover in 2007 | Rs 18 crore |
Initially, Byte had just 4 employees. However, it has traversed a long way since then. Solely into sub-distribution, the company now has over 20 employees. An exclusive distributor for D-link in MP, Byte is also regional distributor for HCL, and sub-distributor for Lenovo, IBM, Seagate and Intex. The company garnered a turnover of Rs 18 crore last year and expects to more than double that this year.
Goyal recently launched a 500 sq ft store to display products just for dealers and resellers. His USP or success comes from the value-added logistics support that the company provides to its partners. These services include free door-to-door delivery of products, free telephonic support for its entire range of products and a replacement or standby for all products in case of warranty claims.
He is planning to stick to sub-distribution and plans to add more products, notebooks and home entertainment products such as LCD TVs and theatre systems to his kitty. “Being a D-link partner, I am also planning to float a separate company that will specialize in providing networking solutions to my customers,” says Goyal.
Being the President of the Madhya Pradesh Telecom and Computers Traders Association he often tries to provide solutions to the issues and challenges faced by the partners in Indore. “As a result, earlier this year we released a standard rate card for all types of post-sales services and for all products priced below Rs 5,000,” elaborates Goyal. |