Tirupati: Price Matters

The city which attracts visitors from all over the world, is also one of the hotspots for education and small businesses

Tirupati is one of the most revered places of worship for Hindus, especially South Indians. It is located in Chittoor district of Andra Pradesh. It's is well known for its famous Venkateshwara Temple, which is surrounded by seven hills namely Seshadri, Venkatadri, Garudadri, Narayandri, Vrishabadri, Anjanadri, Neeladri. Because of the presence of hills, the deity is known as ' Yedu kondala wada ' in Telegu, which means resident of seven hills. Apart from the Venkateshwara Temple, Tirupati is also known for its wooden toys and copper articles.

Leaving the tourist attractions aside, Tirupati is home to more than 50 computer dealers. The city is a growing hub for the education segment and SMBs. It has well-known engineering and medical colleges. Due to its close proximity to Bengaluru, Chennai and Hyderabad, Tirupati is a fast growing tier-2 city. Tirupati has an active association called TCDA ( Tirupati Computer Dealer Association ). Like all upcountry cities, this city is also not free of problems. Warranty poses a huge problem for dealers and service is always in demand. P Ravi Babu of IC Tech and Secretary of TCDA said, "There are few service centers and when ever we face issues, we either take it to Bengaluru or Chennai. It will be nice if we can have service centers in Tirupati. The customer also feel assured and we will have few logistical problems."

Almost all the leading brands like Dell, Compaq, HP, Lenovo, Acer, Samsung etc are present here in the market. Home and SMB segments form the major revenue vertical. B Prashanth Srinivas Murthy, Proprietor, Micro Computers said, "I deal in networking products from Microsoft. The main problem which dealers like me face, is service issue. We get maximum DoA cases and each case takes more than a month to solve. I have to face the brunt of the customer. When the margins are so less and so much of competition, it will be nice if the vendors can have a simplified process for after-sales service. Tirupati is a growing market and the overall turnover is also close to 80-1.5 crore. Atleast the distributors can take notice of this problem and do something in this regard."

The city also has presence of telecom partners who time and again try to get into IT selling. Srinivasulu Reddy of Hitech Computers and President of TCDA concluded, "Since, it is a growing market, issues are bound to arise. Price variation poses a problem .The agenda of our next meeting is to discuss possible solutions to all the existing problems like warranty, service, price and stock."

Perla Ravi Babu, Secretary of TCDA and Proprietor of IC Tech

What are the current trends in the market?

The market is slow but it is growing. There is a lot of competition since there are too many players in the market and the demand is not equal to it. Since, home segment is the major earning stream, laptops move faster.

What are your main concerns?

We have a lot of price variations. Because of close proximity of metros and increased customer awareness, it is difficult to sell especially when the margins are low. We are now quoting the same prices as what one would get in metros but vendors should also help us. There should be special schemes rolled out for upcountry partners. Without any assistance it is increasingly becoming difficult to survive in the market

What are your expectations from vendors?

Even though December and January have been festive months, we have not yet reaped any benefits because of lack of marketing. We can roll out schemes or offers on personal basis but for how long? If vendors also help us either in marketing collateral or finance etc, it will give us that extra push. With our IT expo, which was conducted two years back, we were able to retain 30 percent of our customers who were purchasing from metro cities. This year too we want to do the same with vendor support.

What are your immediate goals for 2011?

We want to curb price variation and are thinking of ways to do the same. Our next goal is to solve issues which dealers face in their daily business. We will take it on a case-to-case basis.

Warranty and service are also pretty huge problems. It is not possible for every vendor to set up service centers in each and every city but they can at least streamline the collection process. Customers will also be assured that they will receive their product within a specified time. One positive step that TCDA has taken is reducing stock dumping to a great extent.

Market Name - Tirupati

Surrounding Markets - Chittoor, Chennai, Bengaluru, Hyderabad, Cuddapah, Anantpur

No of Dealers - 50

Brands - Acer, Samsung, HP, Intel, Lenovo, Samsung, Dell

Distributors - Ingram, Redington, Accel