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No Power turns 'Loom' city into 'Gloom' city

Erode market is witnessing a lull in terms of IT business. Partners attribute the reason for this slump to the power-cut issue which is adversely effecting the business of the 100+ dealers of the city

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Ranjeeta
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About 400 kms southwest of the state capital Chennai, Erode is situated in the south Indian state of Tamil Nadu, on the banks of the river Kaveri. Textile is the major business in the city and Erode is well known for marketing of hand loom, power loom and ready-made garments and textiles. Erode produces about 47% of state's total textile needs. Erode is also known as 'the Turmeric City' or 'Yellow City'. Erode is the largest producer of turmeric in the state and has one of the largest markets for coconut. It is famous also for rice cultivation and oil mills, as well as for dairy products.

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As far as the IT industry is concerned, the city has a well-established market, with an annual revenue of around Rs 10 to 12 crore. The city witnesses the presence of more than 100 retailers, who deal in a range of IT products and peripherals. While a major chunk of business comes from SOHO, the dealers and distributors in the city also serve the retail, corporate and educational segments. However from the past few months, Erode market is witnessing a lull in terms of IT business. Partners attribute the reason for this slump to the power-cut issue which is adversely effecting the business of the 100+ dealers of the city. D Baskaran, owner, ABC Infotech said, "Current market scenario is very poor, mostly due to power-cut. All segments are badly hit." Added B Dharmaraj, owner, Ascent E-Digit Solutions. He said, "December was pretty good in terms of business. But January onwards, the situation has turned bad. Power-cut is a major issue out here in Tamil Nadu, this poses as the major reason for dip in sales."

Talking about the growth verticals and the top-selling products and brands in the city, Baskaran said, "Although all the verticals are doing bad, SOHO still manages to give us a little business in the city. And among the brands and products it is mostly HP laptops that sells here and also the branded all-in-ones." Dharmaraj said, "Retail is not doing good, SMB is very low, even government is not contributing. All verticals are down at the moment. Among the brands its mostly Samsung, Sony and Dell laptops which sells." A Muthu Ravichandran of Intone Technologies also said in concurrence, "Dell laptops sells the most in Erode."

Erode IT Dealers Association (EDITA) is the local IT association functioning in the region. It is quite active in the region. "EDITA very active in the region. It conducts regular meetings. It also conducted family get-together in the past," said Baskaran. Both Dharmaraj and Ravichandran agreed with Baskaran and said that EDITA is functioning really well in the city.

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Predicting the future scenario of the Erode IT market Baskaran said, "Coming few months would be tough for dealers like us, as the profit is low and competition from online is on the rise." Ravichandran also predicted tough times ahead, however Dharmaraj had something else to say. He concluded, "We are hopeful of a positive future. We expect a 70% growth in the coming months."

Market Name: Erode

Market Location: Tamil Nadu

Surrounding Markets: Coimbatore, Bengaluru, Madurai, Trichy

Number of dealers: More than 100

Prominent Dealers: ABC Infotech, Ajay Information, Bravo Systems, Genuine Computers & Technologies, Imperial Computers, Intone Technologies, MACS Eectronics, Power Computers, Prithvi computers, Univac Technologies, Vasavi Systems

Computer Association: Erode IT Dealers Association (EDITA)

Business Verticals: SOHO

Interview 1:

D Baskaran, owner, ABC Infotech

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What are the top-selling products in your city?

HP laptops and branded all-in-ones.

How active is EDITA in Erode?

EDITA very active in the region. It conducts regular meetings. It also conducted family get-together in the past.

What are your market predictions for this year?

Coming few months would be tough for dealers like us, as the profit is low and competition from online is on the rise.

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Interview 2:

B Dharmaraj, owner, Ascent E-Digit Solutions

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How has the market been in the last 2 months?

December was pretty good in terms of business. But January onwards, the situation has turned bad. Power-cut is a major issue out here in Tamil Nadu

What are the primary growth verticals in Erode?

Retail is not doing good, SMB is very low, even government is not contributing. All verticals are down at the moment.

What are your market predictions for this year?

We are hopeful of a positive future. We expect a 70% growth in the coming months.

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