Will Kolkata based companies be feeling the heat soon in Siliguri?
After carefully summarising the growing threat to the local channels market from "outsiders" and frustrated with its relationship with Confederation of Indian IT Associations (CIITA), Siliguri based North Bengal IT Traders Association (NITO) has decided to ahead with radical steps in dealing with companies not based out of Siliguri.
Following the general opinion among its members, the association will start forcing companies originating "out of Siliguri" to close down their respective branches in the area. According to NITO, the companies (primarily from Kolkata) in order to meet their targets have not just eaten into the local market with some unethical trade practices but have also started treating branches as distribution points. While CIITA's National Distributor Policy (NDP) gives all companies a free hand to operate nationally across segments under a same brand name, NITO has considered this move as an "encroachment on the local market".
The dramatic move is likely to be implemented soon with NITO officially stating "the forced closure can happen anyday; maybe today, maybe tomorrow".
"Companies based out of Kolkata are not just meeting their targets in Siliguri, but is also using these bases to supply the extra stock across markets in north Bengal and north-east India", said Sankar Dhar, secretary, NITO implying that these Kolkata based companies are able to play lucratively in the market.
"On the other hand, since the market is saturated with players from Kolkata, the local partners are not only losing business, but also potential business as well", he added.
The spark came in Siliguri after the Cooch Bihar association (CCDA) forced branch employees of Siliguri based Crystal Technology to shut down their branch in Cocoh Bihar.
After this drastic move, NITO felt frustrated enough to push for this resolution which the association had so long decided upon.
A majority of channel partners in Siliguri and members of NITO questioned the viability of some major companies headquartered in Kolkata stating that channel partners in Siliguri needs to have clarity about the nature of business of the companies in Kolkata who are operating in Siliguri.
This move came in soon after the proposed realization from NITO that Kolkata based companies are controlling more than 80% of the total market in Siliguri with upcountry markets in north Bengal taking a severe blow in terms of operations and conduct of business.
On a previous occasion, Jayanta Halder, a member of NITO had alleged, "NITO seeks clarifications from some of the Kolkata based companies operating in Siliguri over their actual stance and grouping in the channels trade. Often, companies open branches and appoint channel partners stating themselves to be either national distributors or sub-distributors. On the other hand, we find these very companies (distributors) operating in the retail and end-user billing category".
With the militant move from NITO likely to take place April 10 onwards, NITO has also mulled about their relationship with CIITA stating.
An office bearer of NITO stated, "Now, we don't have any confidence in CIITA and will not refer our move to any association or confederation. We had refered our problems to CIITA time and again as well as hoped for a merger of the two associations in Siliguri moderated by CIITA but it resulted in aggravating the situation more".