Kings of the Channel

Is the following statement true or false: The IT channel community has a
majority of Marwari entrepreneurs? If you answered 'False', then you are
sadly mistaken.

For instance, almost 90 percent of the channel in Kolkata comprises Marwari
business people. This community is strong in the western region and even down
south in places like Chennai. In fact, there is a standing joke that when Neil
Armstrong took the first step on the moon, he was greeted by the sight of a
Marwari gentleman coordinating stock prices on earth.

First-generation entrepreneurs

Most of the successful channel companies are headed by first-generation
entrepreneurs. Take the instance of Samit Jain of SK Trading in Ludhiana, who
got into this business at the age of 19. Or that of Sanjay Jain of Computer
Network in Ranchi or Rakesh Jain of Supreme Computers in Chennai. Or Sanjay Jain
of Jalan Distributors in Gorakhpur, whose father and brothers were earlier
engaged in the foodgrain business. Or Sarad Bawri of Lifeline Enterprises in
Shillong. The list is endless.

In some cases, these people were encouraged by their family to get into the
IT business. Reminisces Rakesh Jain of Supreme Computers, "My father was in
the textile business and it was not doing that great. So, he asked me to
identify a new business line, where we can invest and grow. Also, he wanted to
give the new project completely to me, in which he was willing only to invest. I
decided to get into IT."

In other cases, people got into the channel business envisioning it to be a
great success. Arun Jalan of Jalan Infotech, Kolkata falls into this category.
Though his family was into manufacturing rubber rings in Dubai, he diversified
into IT, which he felt was the next big wave. And his business acumen was proved
right.

Family values

Marwari communities lay a lot of onus on family and unity. Major business
decisions are often taken after a family, especially elders, into consultation.
Rakesh Jain had consulted with several of his relatives about the scope of the
IT industry before getting into the business. Even today, he goes back to them
whenever he wants s second opinion. "Whatever Supreme Computers is today,
it is only because of the guidance from my father, and of course, support from
my brother, Jitendra Jain. My father helped me to introduce many new systems and
processes in business, through which we streamlined our operations and
registered good growth," he points out.

Kapil Jain of Bhopal's Microworld is also indebted to his father who put
him on the right path when he was wondering which business to get into. Even
Sanjay Jain of Jalan Distributors recollects how his father's contacts in the
community helped him start his business and get orders.

Nitesh Bhandari of Chennai's Texonic Instruments chose to join his dad's
business because he would have the freedom to implement his ideas in his own
fashion. "In a job, I would have to work for a fixed salary and under
somebody else's instructions. Now, I am my own boss and also in a field as
vibrant as IT," he says with pride.

Working in an environment where more than half your peers belong to your
community can be very comfortable and profitable. To start with, you are related
to a lot of your peers and, therefore, the chances of being gypped are minimal.
Secondly, finance matters are often done through word of mouth, since there is
an underlying belief that these promises will be kept.

This can also be a reason why Marwaris like to keep the business within their
family. Rupesh Kedia of Jaipur's Computer Supermart feels that this can also
work against the entrepreneurs. This is because they are more inclined towards
their relatives, who might not deserve the position rather than trust an
outsider who might be a good worker.

Why Marwaris are popular

What is it about Marwaris that makes them good business people? One reason
could be that they are trained early on in life, on the basics of trading.

JP Modi of Delhi's Modi Peripherals feels that business is in the very DNA
of a Marwari man. "Even if we don't go to any business school or
university, we are most likely to excel in business in general. Certain business
ethics and values are given to us on a daily basis right from childhood and it
all becomes a part of our lives," he notes. Motilal Jain of Hubli's Balar
Intertrade too agrees with him. "Our way of thinking, our business ethics
and above all, financial support to do business, gives us an upper hand as a
business community," he says.

Sarad Bawri of Lifeline Enterprises feels that since Marwaris traditionally
come purely from a business background, they are well versed with its various
aspects. That can make a difference.

Jatan Baid of Kolkata's Eastern Comnet agrees with him and points out that
customers have faith in them as they feel that a Marwari businessman will not be
dishonest.

Stronghold in the channel

There are many reasons that can be attributed to Marwaris dominating the
channel community. One is that when they got into the IT business, they had the
first mover advantage. Also, the margins prevalent then were very good, which
enticed them.

Sarad Bawri offers another reason, pointing out that most of the
entrepreneurs in this space got into this business around the same time,
probably noticing each other's success. "The younger generation back then
was searching for an emerging field. This is why you find so many Marwaris in IT
trading," he says.

Another facet that worked in favor of Marwaris is that their strong finance
background permitted them to venture into newer business domains. And these
people are good at understanding whom to sell, what to sell, when to sell and
what the price should be.

While being a Marwari might equip a person with some inherent gyaan, a lot
depends on the person's ability to succeed in his chosen field. As Rakesh Jain
notes that caste or creed doesn't have much significance in business. It is
credibility and customer service that matter most.

(Vinita Bhatia in Mumbai with inputs from Piyali Guha in Kolkata.
Subbalakshmi BM in Bangalore. S Gopi Krishna in Chennai. Zia Askari and Sandhya
Malhotra in New Delhi)