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Dell to revamp its distribution business Resellers to be phased out

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DQW Bureau
New Update

Asim Raina


Penang, Sep 12

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The wholly-owned Indian subsidiary of Dell Computers--the $ 25 billion PC

giant--is in the process of revamping its distribution business in India. This

means that a number of its current distributors will be replaced by some new

ones who will be selected on the basis of a set of parameters.

This was disclosed by Ron Goh, VP (Asia), Dell Computer Asia Pte Ltd in an

exclusive chat with Cyber News Service. He also disclosed that in line with

Dell's worldwide policy of selling direct to customers, sales of Dell machines

will be stopped through the reseller channel in India. Accordingly, all its

distributors will have to sell directly to end customers including bidding for

government tenders. Elaborated Goh, "Every machine we ship from our plant

has the name of the customer on it unlike other PC vendors who have no idea

where the machine is going to land up as it would pass through several layers

comprising of distributors, sub-distributors, resellers etc."

It may be recalled that just last month Dell had announced the commencement

of its direct selling operations in India. This was a result of the company

getting the FIPB approval for setting up a wholly-owned subsidiary in the

country on June 27. After that it got its first direct order from Fabmart on

August 16 worth Rs 11 lakh for a server.

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With the subsidiary in place, Dell is now pushing to make its presence felt

in the country with some aggressive moves. Top on its agenda is the appointment

of a Country Manager--a post which has remained vacant for more than a year

after the previous incumbent left. According to Goh, the person has been

identified and he will be joining shortly.

Currently, Dell has around 20 employees in India with offices at Chennai,

Delhi and Mumbai apart from the headquarters located at Bangalore. The company

expects to grow this number to 75 to 80 within the next one year.

But the biggest activity in India for Dell is the setting up of the call

center at Bangalore which is slated to become operational before the end of this

year and will have around 20 seats. The call center will have two

compartments--technical support and sales & marketing. Goh revealed that the

plan is to have 1,000 seats in the call center in the next one year time. And

once that happens, it will become a 24 hour call center where people will work

in shifts and will cater to not only India but also all the other

English-speaking countries.

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Interestingly, Dell has decided not to launch for the time being its India

specific website which would have meant customers ordering online as is the norm

in the US. The reason for this, according to Goh, is that e-commerce is yet to

take off in the country which will only happen once proper cyber laws become

operational.

However, the company will look at the possibility of building some dedicated

pages for some key Indian customers on its main website where 46,000 customers

worldwide have dedicated premier pages. These pages are normally given to those

customers who consistently buy products worth $ 10 million annually. But for

Indian customers, revealed Goh, the threshold of $ 10 million will be reworked.

With all these activities in place, the company expects to grow by three

times this year. It claims to have grown by a whopping 231 percent in the last

fiscal. According to Goh, "We will continue the three digit growth for the

next couple of years."

According to IDC India, Dell sold around 25,000 machines in 1999-2000

(April-March) which gave it a market share of 2.2 percent and the seventh

ranking amongst the top ten PC vendors in India. And this ranking is unlikely to

change in this fiscal as per IDC. Elaborated Aditya Pant, Head (Research

Operations), IDC India, "The real growth in the Indian PC market is coming

from the home segment which is catered to by the resellers. I fail to understand

how Dell will grow its current numbers by three times by stopping all channel

activities."

(CNS)

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