Dell to revamp its distribution business Resellers to be phased out

Asim Raina
Penang, Sep 12

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.

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.

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

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


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