PERIPHERALS: Acer Sticks to Right ‘Channel’

The LCD and optical products market in India is gearing up, slowly but

steadily. And with Acer Peripherals appointing Delhi-based Summit Infotech to

push its optical products and LCD monitors, particularly in the north India, the

space begins to look interesting as well. Both the product categories being

niche, the appointment assumes significance since the job here will be to create

the market rather than just pushing boxes.

Said Sandeep Nair, MD, Acer Peripherals India, "Being niche products,

the vendor has to be able to sell solutions to customers and sometimes this

entails creating a market. Summit has a good track record as far as niche

products are concerned since it has been handling products like Adobe and Quark,

which are essentially niche products."

One of Summit’s major success stories has been Umax scanners that have

maintained the number one slot for scanners in the country for three consecutive

years now. The success here has been attributed to the fact that Summit took on

the distributorship of Umax scanners when the market for scanners was relatively

nascent.

According to Yashpal Bindra, director, sales, Summit, "It is easier to

create a market and gain marketshare than following the leader where gaining

inroads is much more difficult. Once the market exists, the only way for the

distributor to make inroads is through price points and it hurts the bottomline

when one resorts to cutting margins."

It is due to the need to expand the market that existing players like Samsung

and LG have welcomed the entry of Acer Peripherals into LCD monitors and optical

products. The challenge before these vendors is two fold–to educate the

customer and the high price points. And for both these issues, market expansion

is critical. Elaborated Ajay Kapila, VP, sales and marketing, LG Electronics

India, "Acer’s entry is a positive development since it is a restricted

market we are addressing for these products. So we shall all be targeting the

same customers and it will help in market development."

Service is a critical aspect for the success of these products since both the

LCD monitors and the CD-RW cannot be repaired and have to be replaced in case of

damage. Therefore, customer support will be a critical factor in determining the

winner in these categories.

However, it is also to be noted that most of the Samsung sales in these

product categories take place in the direct selling model. Justifying the

reason, Prakash added, "Since these are products that require customer

education, it is but logical that most of the marketing is done by Samsung

itself. The definition of channel is essentially to ensure reach for achieving

volume sales."

So, is the Acer strategy wrong? "No", countered Nair. "We are

100% channel driven and our partners play a significant role in the success of

our products. We are selective about our partners and are confident of

Summit."

Summit will target the corporate sector, SOHO segment and the government for

the two product categories. It is a challenge that the company is looking

forward to. "For one," said Bindra, "the Acer Peripherals brand

awareness is low. Second, the product range itself is niche and requires market

creation. Third, we have to ensure the reach of the products which we are

confident with a dealer base of 250 across the country."

Balaka Baruah Aggarwal



Cyber News Service, New Delhi