Upcountry partners say no to Elcot

PC manufacturer Acer is on the verge of losing its business in Tamil Nadu.
Recently, a few upcountry partners from Coimbatore, Madurai, Tirunelveli and
Vellore expressed their displeasure at Acer's decision to supply laptops to
Elcot at a very discounted rate than that available in the market. Going a step
forward, partners in Coimbatore and Vellore hve even stopped billing Acer
products in their regions.

Adding to this the partners in these regions have also opposed the proposed
Elcot-channel tie-up that was set to take place in a short time. Just a few
weeks back Elcot had expressed its wish to rope in the channel in supplying
laptops to students at a cheaper cost in order to bridge the digital divide. The
channel also responded positively and there were a round of meetings between C
Umashankar, MD, Elcot and representatives of Confed-ITA.

Suddenly few partners in regions like Coimbatore, Madurai, and Tirunelveli,
which control a majority of the upcountry market, have shown discontent over the
tie-up with Elcot. They have also reacted strongly to Acer's moves in launching
a fresh model for Elcot's mass procurement. “We have decided not to go with
Elcot and have also stopped billing Acer products. A vendor can't operate two
price strategies and rollout two different models for the end-customers and
market, as we are also dealing with the end-users. Until we are offered the
Elcot price from Acer, we can't afford to sell their products in the market,”
informed P Rangarajan, Secretary, Coimbatore, Information Technology
Association.

“Elcot is primarily a consumer and they in turn can't sell to the channel.
And for short-term benefit, the channels should not tie-up with Elcot. Acer
doesn't have any distribution tie-up with Elcot, due to which one can't expect
any service support from them,” pointed out R Mahesh, CEO, Ozone Computers,
Coimbatore.

“We have had parallel imports and have suffered major losses, however we are
still doing business and now the issue of parallel imports are completely
curbed. Similarly, dealers mustn't be emotionally bogged down and join hands
with Elcot. In turn they must take some action against Acer, which is playing a
double role,” he averred.

Partners in Madurai also feel that the tie-up with Elcot wouldn't be a
solution to the problem. “Our partners are totally against joining hands with
Elcot. They feel that it is difficult to deal without service support from the
distributor. They are also used to dealing with distributors and are confident
of solving their issues with them. However, they don't have the similar
confidence in Elcot and fear that it would affect their business in a large
way,” informed Selvasekaran.

He also said that the association is totally confused with the scenario and
blamed Acer for bringing discontent among traders. “We were united for the last
one year fear that we might lose that unity. As different people have different
perceptions, it is hard to convince everyone and presently I am in dire need of
some solution for this issue,” Selvasekaran claimed.

Vellore Association for IT (VAIT) is another association, which is strongly
opposing the deal with Elcot. It has refused to join Elcot and has also banned
Acer for a year until they get any solution for the present market situation.
“We have banned Acer for a year and we may also extend this until we get the
same price offered to Elcot, as we are also selling predominantly to the student
community. During our emergency executive committee (EC) meeting, VAIT decided
not to go with the ELCOT deal, as our dealers didn't find it suitable,” informed
J Prakashraj, President, VAIT.

Almost 50 percent of the partners in Tirunelveli are also opposing the tie-up
with Elcot. “We are confused as to whether we should opt for the Elcot tie-up or
not, as 50 percent of our partners are opposing to the move, as they fear that
the tie-up can't bring any long-term benefit for them and will ruin the sales of
other products in the market. There is also a stern pressure on us from dealers
to ban Acer products from the market,” informed H Naushad Basha, President,
Computer Dealer Association Of Tirunelveli (CDAT). He informed that the decision
on imposing a ban would be taken only after the EC meeting, which would happen
during the weekend.

Followed by Coimbatore and Vellore, Tirupur IT Traders Association is also
planning to stop dealing with Acer products shortly. “We would stop selling Acer
products shortly. However, we are looking forward to the tie-up with Elcot to
take forward the student laptop scheme. We heard that the response for the
laptops are very good and we don't want to miss this opportunity provided by
Elcot,” informed, K Babu, Secretary, Tirupur IT Traders Association.

When contacted, a senior channel member, he informed that majority of the
partners across the state are willing to go with Elcot and sell the laptops. “We
don't see it as a great business model, however no one wants to miss the
business too. We can understand the problems of dealers, who are opposing the
tie-up with ELCOT and we totally agree that this is Acer's mistake. But we can't
blame Elcot for the move, as it is offering the laptops only for a noble cause,”
the dealer informed on condition of anonymity.

When contacted S Karthikeyan, President, Confed-ITA, said that the decision
to tie-up with Elcot or not would be taken during the EC meeting that is taking
place on July 13. “There is much confusion and opposition over the tie-up. We
learnt that Acer is also putting pressure on Elcot to reject the tie-up with
channel partners. We can come to a conclusion only after our EC meeting,”
Karthikeyan informed.

When contacted, R Viswanathan, Regional Sales Manager-Tamil Nadu, Acer India
said, “Acer is committed to channels as a part of business strategy and will
strive not to cause any inconvenience to partners.”