Channel peace restored in TN

NR Sethuraman Chennai, Sep 28

After days of protest over the discounted prices offered to

Electronics Corporation of Tamil Nadu (ELCOT) by vendors like Lenovo, Samsung

and Dell, the situation in Tamil Nadu's channel fraternity is returning to

normalcy as business has started getting back on track. Trade in the state had

come to a standstill after vendors like Lenovo and Dell were accused of

providing products at low cost to ELCOT. The channels had in fact stopped

selling Lenovo laptops and returned their stock to distributors.

Owing to this reaction from the channel, vendors withdrew their

offer to ELCOT. In fact Lenovo has completely pulled out from ELCOT's business

and Samsung has agreed to the channel's demands.

When contacted, the spokesperson for Lenovo said, "Lenovo

has retreated from the notebook offer as we did not receive even a single order

from ELCOT. We took up the deal only because it was exclusively for students. We

understand the concern of our channels that this could be misused and have since

come out of the deal."

Similarly, Samsung had decided to offer a three-year warranty

for its products sold to ELCOT, while partners were given the same products with

just one-year warranty. This disparity in the warranty policy riled the channel

and they asked Samsung to either reduce the warranty period extended to ELCOT or

offer the same policy to dealers as well.

Reacting to the this demand, Samsung decided to offer the

extended warranty period to products sold through the channel as well, to create

a level playing field. Sharad Agarwal of Samsung India, said, "As per our

policy, we provided such an opportunity for the government-especially for the

student community but that has created huge contempt among our channels. We will

shortly offer a three-year warranty to the channels too."

These victories have buoyed the channel's confidence and they

have now decided to deal with other issues as a unified body. It has also made

the channel community realize that they can demand for parity in vendor policies

and have their demands met.

Said PN Prasad, VP, Confed-ITA, "The whole issue arose only

due to the lack of confidence in the channel as the vendors ran for bulk

bookings and increased volumes from government agencies. Vendors have to trust

the channel completely and the channel in turn has to maintain the same level of

confidence in vendors. Even if one of the two fails, the whole system gets

upset."

Added S Karthikeyan, President, Confed-ITA, "Vendors should

have clear policies and always be open minded. Every partner cannot be aware

about what is going on outside the industry. So when companies create some

policies and act on that, they should inform partners about it." He added

that when a trade is carried out, it should be continued without adding

complexities for seeking short-term benefits.

Having one set of policies for the channel and one for other

customers would always be dangerous for the vendor, opined PK Harikrishnan,

President of Cochin-based All Kerala Computer Manufacturers and Dealers

Association (AKCMDA). "Two different strategies cannot be followed because

confusion and loss becomes inevitable. Every vendor must be transparent in its

business dealings with the channel," he said.

With the current channel uprising, it is unlikely that any other

vendor would contemplate offering different policies to the channel or any other

customer vertical. The unity displayed by the channel community in Tamil Nadu

has also sent out a clear message that partners in the state will not hesitate

from taking drastic steps, like stopping business with a particular vendor, for

the general betterment of their community.