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Mangalore, Karnataka
Mangalore is the chief port city of the state of Karnataka. The Mangalore economy is dominated by agricultural processing and port-related activities. The city is home to automobile leaf-spring, petroleum, boat-building and fishing businesses. The local beedi-rolling business is also famous. Some well-known local entities are Lamina Suspension Products, Mangalore Chemicals and Fertilizers, Kudremukh Iron Ore, Mangalore Refinery and Petrochemicals, and BASF.
Major information technology and outsourcing companies have started locating their facilities here; these include Infosys, Mphasis, TCS and Wipro. The HQ of Karnataka Bank and Corporation Bank are located here, and almost all banks and insurance firms have a branch office in the city.
With such huge potential in the industrial and corporate segments, the Mangalore IT channel community, comprising about 100 partners, records 30 percent growth year-on-year. But the industrial and corporate segments generate only 50 percent of the total demand. The home segment and students seek about 50 installations per month, out of which laptops account for 70 percent. According to Eknath Shenoy of Maruti Traders, “Laptops are demanded not only by college students but also school students. The demand for laptops arises because of their face-value, not because of necessity.” Acer, Compaq and Lenovo are the most in demand.
Apart from laptops, other products that have seen increasing demand are inverters and UPSs. Mangalore being prone to thunderstorms, the place suffers from frequent power cuts, so energy backup is a major issue.
There are major developments in the offing, including an Export Promotion Industrial Park, IT SEZs, and the Petroleum, Chemicals & Petrochemicals Investment Region. With these, channel partners expect doubled growth.
But in spite of this, the community faces many impediments. If the proximity and good connectivity to Bangalore has helped them stay abreast with the latest technologies, and routed many industries to the city, it has also brought in many side-effects.
Many colleges here tie up with vendors to deliver laptops to their students, but often the delivery is done directly from Bangalore dealers. This takes away about 200-300 customers. The same thing happens with many corporates.
The channel community suffers from cut-throat competition and price-undercutting. Many local partners buy from Bangalore at lower prices, and, after setting their margins, sell the products in Mangalore at rates lower than the street prices. This helps them finish their stock and avail of good incentives from their distributors. Easy cargo transportation has also invited parallel imports, further adding to the price-undercutting in the city.
According to the community, vendors follow an aggressive strategy to tap the market. They conduct road shows and put up many hoardings. Another face of this aggressive marketing: vendors keep adding to the targets of the resellers.
 Profile
Durgesh U Kedilaya,
Managing Partner,
Silicon Info Solutions
“If you keep adding brands you don’t add to your revenues”
Starting about six years back with five employees, Silicon Info Solutions of Mangalore has not only doubled its manpower but also its business. The company has also added many more products to its portfolio.
Silicon was earlier into the sale of desktops, laptops and printers. Today, it also provides services like annual maintenance contracts, networking services and data management support. The company derives about 60 percent of its revenue from sales and 40 percent from the services side. A few of its clients are Canara Lights, MRPL, BSF, banks and education institutes.
company snapshot | | Company | Silicon Info Solutions | | Managing Partner | Durgesh U Kedilaya | | Year of inception | 2001 | | Brands | Wipro, Lenovo, HP, Compaq, Epson, D-Link | | Products | Desktops, laptops, printers | | Verticals | Home, education, corporate | | Employees | 12 |
According to Durgesh Kedilaya, managing partner at Silicon, “To survive and succeed in the Mangalore market one has to show commitment to vendors and end-users.”
Showing its commitment, the company has dedicated nine of its employees to service and support. Moreover, at the end of every quarter, the company distributes a complaint form to all its customers. “This distribution of forms helps the customers to share their problems. On one side this has helped us build confidence among customers, on the other side many minor faults are spotted and tackled before they become big faults,” Kedilaya adds.
Not surprisingly, the company has retained all of its clients.
Silicon has been working on other strategies to make its own niche in the market. About two and half years ago the company tied up with Mumbai-based Intel Vision Software Solution. Silicon installs CCTVs for, and provides networking aid to the local clients of the company; it now derives about 10 percent of its total revenue from this tie-up.
Silicon has also acquired new clients like ICICI Bank, Bharat Co-operative Bank and Corporation Bank. Silicon receives orders not only from Mangalore but also nearby cities like Shimoga.
The company believes in working closely with its vendors. It plans to continue with its existing vendors and add no new brand to its portfolio. “The trend of multi-brand retail is catching on fast, but I feel that if you keep adding brands you don’t add to revenues—you just add problems to your business.” |
