Zenith exits disti biz, again

A year after venturing into the distribution business Zenith has now quietly

exited it citing reasons such as payment defaults and delay in payments. In

2007, the vendor had announced its plans to foray into distribution business and

had tied up with Taiwan-based Elite Group Components Systems for reselling their

motherboards. This was followed by a partnership with memory vendor A-Data and

LITEON for its ODD range of products.

This is the second time Zenith has resolved to discontinue its focus on the

distribution business. The vendor had started as a distribution company (Zenith

Technologies) in early 1980s but decided to discontinue the business in the late

80s and focus exclusively on its own brand of PCs. However, Zenith did not make

an official announcement regarding the closure of its distribution arm and

quietly moved out of it.

When questioned regarding the reasons for the closure of the business, Raj

Saraf, MD and Chairman, Zenith Computers clarified, “We were encountering

various problems related to payment defaults and delay in payments and were

finding it difficult to continue with the distribution business. We suffered

losses to the tune of Rs 5-7 lakh. Hence, around a year back we resolved to shut

the distribution arm of our business and focus only on our own brand of PCs.”

Zenith was selling the products through its existing set of channel partners

instead of creating a new channel model.

On the other hand, with end consumers looking at LFRs to meet their PC

requirements, Zenith has also decided to reduce the number of Zenith PC Worlds

across the country. The vendor will be closing around 75 Zenith PC Worlds.

“With malls being set up across the country and LFRs getting aggressive, the

end consumers indulge in buying heavily from counters at the malls. So we have

resolved to close 75 Zenith PC Worlds across the country. Presently, Zenith has

as many as 400 Zenith PC World stores in India,” shared Saraf.

Zenith will also be expanding its reach by appointing another 15-20 regional

distributors across the mini metro cities by the end of 2009. The vendor is also

gearing up for government business in order to beat the recession.

“We currently have 35 regional distributors across the country and are now

planning to take the count to 50-60 by the end of 2009. We will be appointing

partners in the mini metro locations as it offers potential for growth and

expansion,”added Saraf.