Dell policies win favor with channel

Dell's entry into the market via channel has given a major boost to its
business making the brand the second most preferred after HP. With the company
revamping its channel policies and getting more aggressive in terms of
appointing partners, the channel is all praise about Dell. On the other hand,
the force with which the company is increasing its visibility has shaken the
marketshare of other competitor brands including leaders-HP, Lenovo, Acer and
Sony.

Sudhir Arora of Computer Gallery, Indore said, “Dell has been appointing
regional distri­butors to capture the market. In Madhya Pradesh they are
covering the tier-3 cities in a bid to penetrate deeper. Besides, the brand's
visibility has increased which was not the case earlier. Dell has revamped its
policies and has now adopted a two-fold model where they are approaching the
consumer both through the channel and directly. While the channel has the stock
and sell model options before them, those partners who do not want to make huge
investments in terms of maintaining the stock and yet be able to sell Dell
laptops can now avail the website option to provide their customers with the
desired laptops and still manage to earn a margin of two percent.”

Navin Gupta, of Patna-based Krishna Agencies seconded the opinion and added,
“Although HP is currently the market leader in Bihar, Dell may soon change that.
The primary advantage Dell has over other brands is the choice of colors and the
design layout and the varied customizations available. Indeed, Dell laptops can
be configured in accordance to the customers needs and the size of the pocket. I
feel that in three months time, Dell may own a marketshare of 25 percent in
Bihar.”

Another highlight of Dell's policy that has impressed partners is that
instead of having a month-end closing, the company has weekend closing which
reduces their burden to a large extent and every week partners are able to keep
a track of the business generated thus far.

Arora further reiterated that so far there has been only one problem with the
company's policy. The products offered by Dell on its website and the models
available with the channel are different and this creates a lot of confusion in
the minds of the customers and hence leads to further confusion in the minds of
resellers. While on the website the customer stands to save on the taxes (four
percent VAT) and additional margin the dealer might charge them. If brought
through channel the customer does not get to enjoy that benefit. However, post
feedback from its partners, the company has now made changes to its policy.

Rohit Kohli of Comexcell Technologies, Kanpur and Master Affiliate for UP and
Uttaranchal region stated, “It has been three months since I have been appointed
Master Affiliate by Dell for UP and Uttaranchal and since then our business for
Dell's range of laptops have been growing by 70-80 percent with every passing
month. This has certainly affected the marketshare of the other brands,
especially Lenovo. Lenovo has for quite some time been lean and as a result its
marketshare has been grabbed by Dell. Dell is also working to reduce the
delivery time of its products. While earlier it was 15 days it is now being
delivered in seven days.”

Anil Mhaske of DataCare, a regional distributor for Pune and parts of
Maharashtra mentioned another good thing about Dell's policy is that they have
just one distributor for their products, which is not the case with HP who has
too many national distributors for their range of products.

According to Joe Verghese, of Cochin-based Accent Netware, the entry of Dell
has brought a definite impact in the sales of other notebooks in the market.
“The service support that we would provide for Dell is driving the adoption of
the brand, besides the brand value it has,” Verghese claimed. He feels that the
channel policies of Dell sound good. “As compared to few other vendors, Dell has
some good policies like offering a five-year warranty for monitors and it
promises a quick response time. So far everything has been good and we expect
this to continue,” Verghese averred. He also felt that Dell has eaten some 20-25
percent marketshare of other brands. “Lenovo and Compaq notebooks are not doing
as well as they were. We can clearly say that Dell has eaten some 20-25 percent
of the sales of the other brands. It was a very good decision to take the
channel route,” Verghese opined.

K Nagendran, CEO, GBS Systems and Services, Chennai also echoed the opinion
of Verghese. “We can clearly say that Dell has take 20 percent sales of other
competing brands like Sony and HP. It has become a hot cake for sales post its
entry into the channels,” Nagendran informed.

However, even those channel partners who are not dealing with Dell laptops
were of the opinion that the company is driving its business aggressively.
Arinjay Jain of Jaipur-based Kanchan Computech opined, “Though I am not dealing
in Dell products I am very much aware of the fact that the company's policies
and programs are being received well by the dealer community in Rajasthan. Many
partners are showing interest in signing up with Dell and hence the marketshare
of the likes of Lenovo and Sony have been hit badly.”

Prafulla Somani of Varanasi-based Jwala Distributors echoed the same opinion
as Jain. “Dell has captured the UP market and is leaving no stone unturned in
making its presence felt. Though we have not signed up with Dell, we find
consumers walking into our shops demanding the brand which is a clear indication
that the company is shaking the marketshare of other brands as well.”

But one dealer seemed to have a different point-of-view. Seeing as Dell is a
new entrant, Pravin Jalan, of Kolkata-based Jalan Infotech felt that currently
it would take a while for the vendor to over throw the current leaders. “Lenovo
is definitely leading in terms of marketshare since its presence in Orissa and
Northeast is immense. Dell is nowhere in the scenario in these regions. But it
is worth mentioning that Dell has done a good job in Bihar in the recent months.
Dell has entered Kolkata only recently but I have a doubt about how far it will
be able to capture the market.”

(Inputs from NR Sethuraman and Avishek Rakshit)