Sales shoot up during Diwali

The onset of the economic slowdown in the middle of last CY heralded the
arrival of difficult days. Where traditionally the channel would look forward to
the festive season as a time when their sales would get a boost, last year
turned out to be a no-show. After the poor performance of the market in the
months around Diwali last year, this year the IT channel was looking forward to
a change.

And this year distributors and resellers across the country shared that sales
were definitely improving and consumer spending was once again reviving.

“This time, Diwali came with positive signs. People were spending more and
this phenomenon could be attributed to indulging in purchase, post the economic
slowdown frugality,” said Mukesh Choudhary, DGM- Sales, North, Ingram Micro.
About the sale figures for this year as compared to last year, Choudhary said it
was difficult to arrive at the number because this time the hype surrounding
spending was more. However, YoY the sales in Ingram Micro remained flat.

In Delhi, partners shared that the overall sales did see an improvement as
compared to last year. “The sale during Diwali was not as bad as we had
expected. In comparison to the previous year, the sale was definitely better
this time. During the working days we managed to make good business but because
of the multiple holidays in between sale was hampered, ”commented Ajaya Kumar,
CEO. Park Computers.

According to KK Jha, CEO, KK Software, this year there was a lot of
excitement surrounding Diwali. “Sales have gone up by 10 to 15 percent from the
previous year and customers were spending during the festival time. This shows
that the situation is now back to normal and customers are spending on
technology once again.”

Throwing light on the Jammu market, Sanjay Langer of AGM Sales Corp pointed
out that for a week, around Diwali time, the market picked up. “This is due to
the mentality of people who want to save their IT purchases for the festive
seasons. We have made almost Rs 25-30 lakh during these few days. The popular
brands are HP, Compaq, Sony and Dell,” said Langer. In Karnal, Harbhajan Singh
of Infotech Computers and Communications felt that growth had been visible for a
few months now. “Market has seen some growth. The previous quarter (JAS) saw
better numbers and even during Diwali we did see good sales. While the demand
for notebooks has gone up, desktops have taking a backseat. Also, sales of
security and networking devices are picking up,” commented Singh.

In the East the situation was similar. In fact with Durga Puja, which is a
major festival in the region, coming just before Diwali the sales were high for
a considerable period. “During Durga Puja and Diwali, the market fared very
well. This time, we registered good growth; 13 percent more than that of the
previous year. I would definitely say that the market has picked up and the
upward trend will continue. The same impact can be felt in the upcountry regions
too where sales are fast picking up. In the Northeast, sales have been
commendable with Guwahati taking the lead beating North Bengal. However, Kolkata
and B-class cities continue to dominate the market,” said a major national
distributor in the East.

But for Rashi, the market maintained a status quo, though East fared better
than other regions. Gopal Pansari, Branch Manager-East, Rashi Peripherals
commented, “Sales during the festive season was not unusually high. The primary
focus was on consumer electronics while the IT market witnessed the usual surge.
However, coming out of slowdown as early as end of Q1 this FY, Kolkata fared
better than other regions. The impact of the slowdown was not major here. While
markets in Delhi and Mumbai underwent a dramatic dip, Kolkata maintained its
balance all through the turmoil with major dealers and companies posting
marginally healthy growth compared to other markets. However, business was very
slow in Q4 last FY. Now, with the market recovering, the average market growth
rate is between five to 10 percent in cities as well as upcountry. Also, Rashi
has registered a staggering 45 percent growth in the East on a YoY basis.”

Channel partners across India saw a 10-15 percent surge in sales during the festive season; a relief from the dismal performance last year during Diwali

In West, partners shared a mixed response to the market. Dinesh Gupta,
Datatronics System, Nagpur shared, “The IT market post Diwali in Nagpur was
good. Notebooks were in high demand. Other components like printers did not show
growth this festive season. I suppose students buying notebooks resulted in the
higher sales compared to other components.”

Sharing similar sentiments, Rita Budhay, Business Algorithms, Nagpur
exclaimed, “We are an exclusive distributor of HP laptops and desktops in Nagpur.
The sales have gone up four times during and post Diwali in Nagpur. There has
been a definite improvement in the sales as compared to the last few months.”

Speaking about the Gujarat market, Talkin Zamindar, Media Infocom stated, “In
Gujarat the IT market has received very good response post Diwali. The festive
season indeed has brought positive response from customers. Compared to previous
Diwali the market this year has increased by 20 percent. Dell and HP lead in the
product sales in the laptop and desktop segments. We hope to see more sales in
the market in the coming days as well.”

Mumbai-based Aarvee Computers is into distribution of HP, Epson and Compaq
brand of products. Vinod Mulchandani, CEO of Aarvee stated that the growth as
far as Mumbai and the suburbs including Thane market was concerned, had been
stable. “For the past few months we have been selling no less than 500 units of
laptops per month. The festive season saw good response in terms of laptop and
desktop sales,” said Mulchandani.

Pointing out that the growth during this festive season was largely driven by
SOHO and consumer segments, Umang Mehta, CEO of Mumbai-based Roop Technology
shared, “The corporates are yet to get into purchasing mode and if they do not
come forth then the coming quarter will witness a major slump in terms of growth
and sales. If at all the corporates begin purchasing, it will happen by the
month of February or March next year. As far as upcountry sales are concerned
there is no denying the fact that the upcountry market has matured.”

Pune and the surrounding markets also showed healthy growth post Diwali. “The
market is improving and showing signs of growth. Compared to last year, 40
percent growth has been registered by our company. The notebook market is
witnessing huge growth and brands including Dell, HP Compaq followed by Lenovo
and HCL have been the biggest contributors to our business,” noted Pune-based
Anil Mahske of Datacare Corporation.

In South, partners felt that the slowdown did not have much impact on the
upcountry regions here and while it is sluggish now, it would pick up during
Christmas and New Year. “The upcountry markets were not impacted much by the
economic slowdown. There was panic in the market, due to which people curbed
their spending. For us we have witnessed that sometimes desktops sales go up,
while other times laptop sales jump. But in general, laptops dominate the
market, as more students prefer laptops than desktops. In my view, the market
will be sluggish during November, but with New Year and Christmas approaching,
December quarter will be very good,” commented Kuberan, CEO, VBK Computers &
Cube Systems, Trichy.

Throwing light on their business in the past one year, Ravikumar, CEO,
Pentagon's Compushop and Exclusive HP World Gold Partner (Madurai), stated, “I
would say business was adversely affected by just about 10 to 15 percent. But
two days before Diwali we witnessed very good sales. I am very positive about
the results of OND quarter.”

For Karthikeyan, CEO, Bloom Electronics, Coimbatore, except May, the whole
year was good and during Diwali sales were normal, “It's June-August, when we
see higher sales, as this is when the students community makes their PC
purchases. OND quarter is normal for us.”

Ketan Shah of Bengaluru-based Kruthi Comp, the exclusive dealers and
sub-distributors for HP shared, “Every November-December we expect a new product
or new additions to the product. For example the change in G5 servers to G6
servers which is doing pretty well in the market. We have seen a 30 to 40
percent growth in sales in laptops, servers and storage equipments. Going
forward we plan to clock higher revenues. Procurve is our highest revenue
earner.”

Ankita Electronics, distributors of Imation India saw a hit on its sales last
year due to its strategy which was to focus on channel sales. Nalin Mehta,
Director, Ankita Electronics shared, “This year we are planning to get in to the
corporate segment rather than focus on the channels. Corporates are more stable
with regard to payments and this helps us a great deal.

Inputs from Amrita Tejasvi, Avishek Rakshit, Minakshi Shetty, Puja Sharma,
Revathi Raghavan, Ruth Samson and N Vasudevan