Not everything is hunky dory in the city, which put the country firmly on the
IT map of the world. I was in Bengalaru a couple of days ago and I realized the
same during my interactions with partners, vendor representatives and even
distributors. There is a definitive sense of gloom in the IT market. The rising
oil prices, the slowdown of business from US and a recalcitrant monsoon have
dampened the spirits of the city. A partner that I met informed me how orders
from US have almost trickled down; business deals, which should ideally have
been closed in December, were still hanging so the cash situation was becoming
tight. On the other hand the cost of running the business was going up thanks to
the rise in oil prices and of almost all essential commodities. Then the stock
markets crashed and property prices went down, so assets that could have been
liquated have been stuck. The fact that the state had failed to receive regular
monsoon showers was just the last straw for business.
With Indian economy still being largely dependant on agriculture a bumper
crop would have revived the flagging spirits and the domestic market. But that
is not the case, the rains in South have at best been scanty and if the
situation continues in the same vein some districts might be declared drought
hit. In such a situation the first things that the common man does, is postpone
buying things, which are not really necessary. And unfortunately in our country
in hinterland computers are still largely considered a luxury and not a
necessity.
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Shivangi Yadav |
Distributors are already talking in hushed tones about how they foresee their
money getting stuck with the partners. With the property market booming, they
say many partners had taken money out of the business and invested it. Now with
the markets going down, selling does not make sense. In fact distributors and
partners have already started counting how many small time partners have shut
shop and disappeared. In tight cashflow this is the last thing that any market
needs and sadly the instances are happening across the country. And it's not
only big distributors who are losing money in such a scenario, even the local
partner community has been affected. With the government surviving the trust
votes and the stock market responding favorably, things were taking a turn for
the better. Even the global oil prices are being said to be coming down bit by
bit. But as I write this, news comes in of serial blasts in Bengalaru-an act,
which will definitely hamper the somewhat upbeat mood, these events might have
caused.
Here's hoping Bengalaru is able to bounce and get its effervescent spirit
back soon.
shivangiy@cybermedia.co.in