MRP disparity and economic slowdown hits Vellore

Lying on the banks of the Palar river besides Vellore Fort, Vellore is one of the oldest cities of South India. Popularly addressed as the Fort city, it has a rich blend of heritage and culture. Places that add charm to the place include the Vellore Fort, the Sri Lakshmi Temple, popularly known as the Golden Temple, which has its exterior laden with gold sheets and plates, Jalakandeswarar temple, among other places. Renowned medical center, the Christian Medical College & Hospital, recognized as India's top medical college after AIIMS, is located in the city. Besides, the district has a dominant presence in the leather and leather based industries. It accounts for more than 37% of the country's export of leather and leather related products.

The city also happens to be an emerging market in the Information Technology space, given its location between the two giant markets, Bengaluru and Chennai. However, if we talk about the market scenario in the recent past, general economy slowdown and pricing concerns seem to have taken a toll on the business. Says M Kumaran, CEO, Sri Balaji Computers, "The market is average; we don't expect to touch last years' turnover. MRP is a major concern these days. Though prices of products have gone up, vendors continue to supply them with the old MRP." S Saravana Babu, CEO, Carewel Systems, also cited similar views. "The prevailing market is little dull, reasons being economic crisis, the perpetuating power problem, and the price factor. " However, CP Praveen CEO, Vasavi Computer Academy derailed from the course and managed to do pretty good business. "We went to the field directly and were able to churn out good business because of our reputation."

As per the channel partners, SME, SOHO, and education are the business verticals of the market. Laptops, AIOs, and tablets are the top-selling products, with the brands of value being Dell, Sony, Acer, and HP. Says Kumaran, "Laptops of Sony and Acer are faring well enough. Besides, we expect AIOs to gain market share." Talking about ultrabooks, Praveen told, "Laptops and AIOs are selling more here. Since ultrabooks are luxurious products, the market is less receptive to them."

The city has a full fledged association, called the Vellore Association of Information Technology (VAIT). VAIT is a part of the Confed-ITA and claims to promote ethical business practices, like 10% margins, after-sales support, one person one company policy, etc. "VAIT is quite active in all respects," informed Kumaran. "Technical seminars are conducted every month. Besides, there is an annual exhibition," added Praveen.

VAIT organizes 'The Great Vellore Bazaar', an IT, industrial and consumer durables fair every year in October. The bazaar is used as a platform to exhibit the current technologies and vital information to the attendees.

Market Name: Vellore

Market Location: Tamil Nadu

Surrounding Markets: Chennai, Bengaluru

Computer Association: Vellore Association of Information Technology (VAIT)

Prominent Dealers: Sri Balaji Computers, Carewel Systems, Vasavi Computer Academy, Dolphin Systems, Intech Computers, Sriram Computers

Business Verticals: SOHO, SME

Number of Active Dealers: 50 (approx)

Interview 1:

M Kumaran, CEO, Sri Balaji Computers

What are your market predictions for this year?

We expect the next quarter to be better in comparison to the last one. Looking forward to a 50% growth.

How active is the IT association in your region?

Very active.

How many PCs are sold annually?

Approximately 5000 PCs.

Interview 2:

S Saravana Babu, CEO, Carewel Systems

What are the current market trends?

There has been a momentum around Tabs and ultrabooks.

Which is the primary growth verticals in Vellore?

Though it is a mix, but SME and SOHO emerge as the primary ones.

What are your market predictions for this year?

The market is totally unpredictable. We can only be hopeful for the better.

Interview 3:

CP Praveen CEO, Vasavi Computer Academy

What is the annual turnover of the market?

Approximately, Rs 40-50 crore annually.

What are your market predictions for this year?

We expect the sales to increase in the coming times.