Vellore : Vendors' support needed

Located just 130km from Chennai, dealers from Vellore frequent Chennai for
most business requirements. In fact that has been the reason regional
distributors in Vellore are not able to make gains in the distribution arena and
grow further.

If one considers Vellore alone for business, the prospects are really less.
It is in fact the nearby regions like Ambur, Vaniyampadi, Ranipet, Gudiyattam,
Walajapet, Thiruvannamalai and Arani that are contributing to the business of
Vellore IT dealers.

The strength of the Vellore market is said to be unity among dealers and the
IT association, Vellore Association For Information Technology (VAIT), which is
considered to be one of the strongest association in South. It is known for
taking bold decisions such as banning companies like HP, Acer from the market.
The dealers are known for the unity they show in the business, where no two
dealers in the association compete with each other for a single project. “We
have around 40 members in our association and we have meetings every month
including three outdoor meetings every year. Apart from this, we do conduct lots
of other activities like blood donation camps, donating computers to schools and
involve ourselves in various other social service activities,” stated J Prakash,
President, VAIT.

As far as the leading brands in the region are concerned, despite the
condition of the market, HCL remains the leading player in desktops and Compaq
is the leader in laptops. Acer and recently Dell, are also seeing a good uptake
among customers. As far as printers are concerned, Samsung, Canon and Epson are
said to be gaining more ground and are overtaking HP in sales. The home segment
is highest contributor to the business of the Vellore IT market followed by SMEs
and they share a ratio of 70:30. While the leather tanneries are a predominant
business in the Vellore district, little does it contribute to the business of
the IT dealers. “Most of the leather tanneries have their headquarters in
Chennai and all their purchases happen there, which brings little business to
the IT dealers in Vellore,” informed M Saravanan, CEO, Carewel Systems, Vellore.

The IT market in Vellore is plagued by issues like price difference, lack of
support to the regional distributors in the region and tough competition from
the nearby Chennai market. “Since Chennai is around three hours by road from
Vellore and has a huge price difference, customers generally prefer Chennai to
the Vellore market. Adding to the agony lots of Chennai players have started
operations in Vellore market, which is giving stiff competition to the dealers
in Vellore,” claimed CP Praveen, CEO, Vasavi Computer Academy.

Praveen said that the dealers have been fighting the price difference for
years and haven't got a solution for it till date. He also cites the lack of
support from vendors for the restricted growth of the Vellore market. “Vendors
need to give more attention to the Vellore market, as they have huge scope and
business opportunities in the district. They need to support the dealers and
only then the market would see an exponential growth. Even the channels tend to
get the products from Chennai despite having regional distributors in Vellore
for mere price difference of Rs 100-200. They take products for credit from the
regional distis and make cash payments in Chennai, which is really hard to
digest,” he asserted.

Saravanan of Carewel Systems claimed that the Vellore IT market expects more
support from the vendors. “This is a small market and we can't afford to achieve
targets like the Chennai dealers in our region. So the vendors should get out of
the habit of setting target pressure and start supporting the channels,” said
Saravanan.

There are no national distributors in the region and the dealers are quite
content with that. According to the dealers in Vellore the positive aspects that
they see in the market include the growth in laptop sales and increasing demand
for entertainment products like MP3 players, iPods and digital cameras.