The Tech Riders

Within a span of three years, India has witnessed a sea change in the IT
hardware scenario of eastern India. While earlier the growth story of the region
took off with the influx of a host of players in the software and BPO sector, in
the last three years it is hardware that has been creating ripples. This has
attracted global IT players to recognize eastern India as the next potential IT
hub, and forced them to share their investments with states like Delhi, Mumbai,
Bangalore, and Hyderabad.

Like the Prince of Kolkata, Saurav Ganguly, the city gradually became the
center of attraction for all and sundry, for both its advantages and
disadvantages. Led by its forward-minded Chief Minister, Buddhadeb Bhattacharya,
Kolkata was declared as one of the most IT friendly destinations within India.
And IT policies were reconstructed to compliment the declaration.

In the last two years, the city has witnessed its top five IT hardware
distributors spreading their wings across eastern India, and now they are set to
take on the rest of the Indian market.

The Forerunners

It was more than a decade ago when Kolkata-based Jupiter International
launched Frontech. Today, it has successfully gained market recognition across
the country as a renowned optical media, PC components, and accessory
manufacturer.

Born in 1992, Jupiter has grown to become a leading distribution company from
eastern India and has established Frontech as a dependable and preferred brand
among IT peripheral, optical media users, and its channel partners. To fuel the
growth of the company, Jupiter has set up its own manufacturing facility in
Baddi. The plant has been set up in technical collaboration with Germany-based
Singulus Technologies. The equipment and technology supplied by Singulus enabled
the company to produce various models of optical media, matching world standards
at Indian prices. The customer-centric approach of its MD, Alok Garodia has been
rewarding, as it stuck to the basicoffering good quality products at an
attractive price backed by a strong after sales support system. Simultaneously,
Jupiter has strengthened its distribution business by adding up brands and
products like, Samsung Pleomax, Foxcon, etc. The company is estimated to have a
turnover of around Rs 200 crore in 2007-08.

The next biggie in the league is Supertron Electronics. Lead by the dynamic
VK Bhandari, SEL has emerged as a powerhouse over a span of three years.
Established in 1993, the company launched its own brand Supercomp in 2006. A
well-planned marketing and branding strategy combined with an improved and
enhanced product line, competitive pricing and a strong support network helped
the company establish Supercomp as a popular PC components and accessories brand
across India within a short span. As per Bhandari, the wide product mix that
Supercomp offersranging from components, accessories, UPS, Mp3 and other USB
devices, and surveillance productsand its focused and professional business
approach has worked in favor to help the company achieve targets. The company
has also initiated various new product verticals like storage, surveillance and
networking and has partnered with leading brands like Seagate, Acer, Intel,
Transcend and recently IBM, to distribute their products nationally.

As Bhandari rightly points out, Supercomp was a challenge for SEL and the
company was determined to establish the brand nationally. It marketed the
Supercomp product line with due aggression all across while maintaining the
quality of the products and reinforced its support structure all over India.

However, he also added that being headquartered in Kolkata has always been a
challenge for the company in its national expansion planning. East being a
small market, our scope is limited since the addressable market is low compared
to North, South or West markets. Also East is not a vendor-driven market, so
naturally the growth has been slow. Therefore, it has been a tough task for us
to expand the way we have all over India, but it is the experience which is
extremely rewarding, he says. Supertron has achieved a turnover of Rs 484 crore
for FY 2007-08.

The Followers

It was about a couple of years back when Kolkata-based Balaji Solutions had
launched its own brand Foxin in the east Indian market. And within a short span
of time the company claims to have captured a handsome market share in the said
region. The Foxin range of products include components, accessories, UPS and
various USB devices, RAM, etc. According to Rajendra Seksaria, director, Balaji
Solutions, The idea behind the launch of Foxin was to make the bottomline of
the company strong and elevate it from being just a box pusher to a brand
promoter.

Not far behind, Technocrat Infotech, the most promising distributor in
todays date from the east, launched its own brand, Bitec in mid-2006. In the
last two years, Bitec has been doing well in eastern India. Thanks to its
well-laid and strong channel network across the region, Technocrat succeeded to
market Bitec products with great penetration across the east. The task was not
very tough since we maintain excellent relationship with our channel partners,
albeit it required a well-planned launch, product positioning and proper supply
chain management backed by quality and service support, says Asif Khan,
director Technocrat.

Bitec started its journey with a single product category, ie, UPS. Keeping
its strategy simple, Technocrat identified a product that has a good demand in
the market. Once the brand was successful in creating its own identity in the
market, Technocrat went on to add more product ranges for Bitec and increased
its reach and sales.

The Late Entrants

The top five distributors from the Eastincluding Jalan Infotech and Lalani
Infotechsurprisingly, were the last entrants onto the brand bandwagon. While
Lalani launched Kanry last year, Jalan launched Leo early 2008.

So far, Kanry has performed well and has created its own demand. It has
launched a wide range of PC and office automation products. Recently, Kanry
introduced consumables for copiers, Mp4 players, headphones, and CRT monitors to
be followed later by TFT and LCD displays. As per KL Lalani, chairman Lalani
Infotech, by next March Kanry will have over fifty product ranges to choose
from for its channel and users. On the other hand, Leo started with UPS since
this product line caters to a larger market and has great demand. It is our
dream project. Having established our self to be counted among the leading
regional distributors in the east, its time for us to achieve the next level of
growth, says Arun Jalan, director, Jalan Infotech.

Expanding Horizons

It seems to be a common strategy for all the above-mentioned players. As
they plan to expand their operational horizon, the companies complemented the
move by launching their own brands which is a way to earn good profits in times
of thinning margins.

Jupiter has its branch and distribution offices at twenty-four major
locations in India including Ahmedabad, Bangalore, Chennai, Delhi, Guwahati,
Hyderabad, Jaipur, Kolkata, Ludhiana, Mumbai, Raipur, While Supertron currently
has 25 branches and channel strength of around 3,500 across the country which
includes places like Mumbai, Nagpur, Pune, Ahmedabad, Delhi, Lucknow, Bhopal,
Jaipur, Bangalore, Hyderabad, Guwahati, Patna, Siliguri, Chennai, Chandigarh,
Cochin, etc.

After setting their feet all across the east, Jalan, Lalani, Technocrat, and
Balaji are ready with their national expansion policies. Balaji has already
started its operation in the north and is keen to capture the market by the end
of this year. The year is important for Technocrat since it is planning to
expand its operation beyond the east. But as has been its strategy from the
beginning, before any new plan the company takes a holistic approach to
strengthen the infrastructure in order to sustain the new development.

Technocrat has built its expansion strategy in accordance with the current
market scenario. Today, maximum growth is coming from upcountry locations
across the country. There for taking a practical approach, the smarter way is to
target these markets explains Khan. As per Khan, before settling to start off
the journey, a clear mapping is desirable for systematic expansion. The company
plans to enter northern markets through Bihar where it is already present, and
start operating in Uttar Pradesh and gradually move up the ladder to spread its
reach across the north. Similarly, through Orissa and Chhattisgarh, Technocrat
plans to gradually move toward central and southern Indian markets.

However, keeping the expenses in mind, the company has decided to appoint CNF
agents in key locations in south and north, and appoint its own sales and
service staffs.

Jalan already has a branch in Mumbai although it is not too focused in the
west at the moment. Meanwhile, Lalani has recently opened branches in Patna and
Raipur. The company plans to launch Kanry in south India next, and open a branch
in Chennai.

While Supertron has already implemented ERP, Jalan, Technocrat, and Lalani
are in the process of implementing ERP, which will further enable these
companies to ensure a smooth control over their business activities.

Piyali Guha

piyalig@cybermedia.co.in