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.