ICT industry playing bigger role in the development of our country as adoption of latest innovation and technology boosts growth of overall economy. The success of government’s all major projects depends on ICT. Its been almost three decades, since when we have seen this IT revolution which took our country from under developed nation to fastest growing nation. IT plays even bigger role currently in changing the lives of each and every citizen of India in some way. We all know the global or Indian IT brands who are offering excellent product and solutions to large consumer base across India. They all are successful brand today and will continue to succeed in coming future due the huge potential of Indian market. But their success is not being driven only by offering good quality products, they succeeded because they choose right partners. These channel partners are real conqueror, who worked hard to sell their products and solutions to different set of consumers. Brands can’t be succeeded in so large territory market like India with their own resources. Channel plays significant role establishing any brands in India.
But in last few years, traditional partners suffered a lot due to emergence of online partners. They are not bothered about online competition, they are concerned about predatory pricing module opted by e-commerce player. Yet this has not hampered their zeal and love for this industry. There are many other challenges like GST compliances, return filling, margins, services issues and many more. DT as a channel publication recently concluded a survey to highlight the major challenges for channel partners. The survey was conducted using online and offline techniques which gave us insight of overall issues related with channel partners. Take a look below the findings of DT IT Channel Survey 2018 report. We have also compiled, this story further with the inputs from key vendors and partners to know more about the current scenario.
Brands: Channel Holds the Key to Success
The role of partners in today’s marketplace is very much crucial as they help brands to reach to their targeted audience and enhance business growth. Distributors bridge the gap between end-users and manufacturers and a manufacturer should treat its distributor as an integral part of their business to have better relationship.
“Channel partners are playing a key role in providing us extensive market reach and coverage. Acer is constantly having clear lines of communication with the partners in order to grow the business together” says Chandrahas Panigrahi, CMO and Consumer Business Head of Acer India. “We look forward to engagement activities where we can meet our partners regularly and develop transparent relations with clear policies and rules that would help us and help them grow. We are conducting programs for partners to educate them about the newly launched products and new developments in the market and the company along with trained sales person. We take great care to ensure our relation with our partners is as strong as possible.”
“Channel partners have played a major role in the overall expansion of Marg ERP business and today we have a PAN India presence. Coming across the local customer base in this segment is the biggest challenge faced by any company which can be easily sorted by our local channel partner existing in that geographical location. Marg ERP has categorized it’s channel partners as per business needs. We work on 2 tier partnership program. First is MMP- Marg Master Partner (Direct partner with Marg) Second is – MP (Marg Partner) – indirect partner working through MMPs. All our partners are an integral part of our system and also pillars of our strength” said Sudhir Singh, MD, Marg Compusoft.
Vishal Parekh, Marketing Director, Kingston Technology & HyperX – India added, “We believe that the Channel Partners are one of the strong pillars of Kingston’s success. They play a vital role in penetrating the market and enhancing the existing customer relationships. We have steadily developed a friendly and supportive relationship with our Channel Partners over the years, which has been more collaborative and value based, rather than being just transactional and price-focused. We believe in growing with our partners, and work with them to develop, maintain and manage productive go-to-market relationships that ultimately help sustain a competitive advantage and create a win-win situation for both. We strongly believe in the spirit of ‘collaboration’, which includes engaging with our Partners at various levels. Effective marketing support, training, incentives and recognition program, have helped us in empowering our Partners and letting them know that we value their contribution to the business.”
Commenting on the importance of channel partners, Bijoy Alaylo, General Manager – SOHO Sales, TP-Link India says, “Channel is the core of business in India. The companies who know how to build the Channel partners will always succeed in India. Specific to TP-Link we always provide support to our channel through brandings, consumer ads, Channel ads, online marketing etc. We do always carry schemes for Channel partners which ensure rewards for their dedication towards selling TP-Link products.”
Speaking on the topic, Manoj Kumar Pansari, CEO, Astrum Holdings Ltd. said, “Our partners’ loyalty is an integral part to our success as a business, and we’re constantly striving to improve our offering of support, incentives and resources to help our partners also grow hand in hand. We have come up with dedicated programs, to bring new partners into the fold as well as build and maintain the relationships with existing partners in the program. Maintaining simple, easy-to-use partner programs and profitable incentive schemes, while adapting partner training and certification to reflect new customer demands, is vital for success. Most importantly, both the brand and partners need to work in unison through effective co-marketing and sales initiatives to develop healthy pipelines.”
Frank Rao, Director, Tenda & IP-COM Business India shared his thoughts on evolving role of channel, “Channel partner is a prime pillar of a brands establishment in any market. If we consider IT Brand and more our Tenda’s vision in India, it is greatly carried out by our enthusiastic and ever supporting channel partners. Tenda as a brand believes in providing our channel partners with best, be it product or support they required. Whichever product we Introduce in India we are making sure we promote it on a good scale so that it’s easier for our partners to sell the product further. Schemes and offers are always considered from time to time so that we keep market active and give our partners something extra than regular. We are having very strong channel base in India. We believe that our channel partnership should be more profitable in business and they should have an overall good growth into that particular segment.”
Rajesh Doshi, Director, Zebronics India Pvt Ltd stated, “Channel partners are the focal point and become our greatest strength to reach customers across all states in India. They do contribute to help consumers get products that are value for their money, and even after that, we make sure the channel partners get their due, for the efforts they put in. This way, our channel partners as well as our customers are happy. We are extremely strong with the channel and there has been increasing good recognition and acceptance of the Zebronics brand. We want to reassure our partners that increasing awareness and brand presence of Zebronics with our aggressive marketing in both BTL and ATL will mean good times for the channel community. There are many channel schemes that periodically vary from region to region/locations so that the efforts of our partners are well paid off but at the same time the terms and conditions control unhealthy competition at large.”
“Channel partners are the backbone of our business. They are also our eyes and ears on the market. Customers can touch and feel the product at the retail shop / showroom which helps them decide fast. We are using digital technologies, mobile app and softwares to provide better services to our channel partners. Shortly we’ll come with an extremely attractive incentive package for distributors and retailers to reward their efforts” added Jasmeet Singh Sethi, Director, Portronics Digital Pvt. Ltd.
Manoj Jain, VP, Microtek International Pvt. Ltd. said, “Channel Partners is most important for as we achieve our sales through our channel partners only. We have complete marketing backup for our partners in terms of BRANDING IN-SHOP as well as DEALER BOARD. We organise dealer meets regularly for feedback and training. Our promotional incentive schemes are regularly awarded area by area.”
Shrenik Bhayani, General Manager, Kaspersky Lab (South Asia) stated, “We are a 100% channel centric company and as our business depends on our partners’ success, we – at Kaspersky Lab – do our best to ensure our partners prosper. We do not sell directly to customers – so all business is managed and fulfilled by our channel partners. Literally, our partners’ success is our success. We encourage Kaspersky Lab partners to not only take advantage of our award winning anti-malware technology, but also our expert training, effective sales and marketing resources. We offer many advantages such as sales and technical trainings, lead generation, pre-sales support and marketing assistance.”
“We at Rapoo, always believe that channel partners are our brand ambassadors, they are the guys who help in making or breaking the buyers’ purchase decisions. So our whole approach is always to give more rewards to our partners in terms of better profitability or incentivize them in cash and kind. We are now also focusing more on marketing activities PR and digital marketing just to ensure that channel partners are benefitted when they are promoting our brand to end customers” said Mukesh Chaudhary, Country Head-India, SAARC & ME, RAPOO Technologies India Pvt. Ltd.
Briefing about the role of channel and the support provided by Digisol to their partners, Mandar Joshi, Head Channel Business, DIGISOL Systems Ltd added, “We have always been a channel driven company and our endeavor is to always improvise on our channel policies and time and again we have been recognized by Channel community as one of the most channel friendly companies in India. We ensure healthy margins for the Channels and also introduce new products with newer applications to increase the scope of growth for the Channels. These new products and solutions enable the channel to value add and hence can generate better margins from their customers. We feel that profitability of the partners plays an important role in motivating them to sell more. We offer the best Marketing & Branding Support to the Channel and the partners who enroll with us are there for long years. We also set targets which are achievable by all. Stocks are easily available as we follow RD concepts rather than ND concepts.”
Altaf Ansari, Regional Business Manager, PhotoFast said, “We at PhotoFast, believe that the Channel Partners are key to our business to succeed in India. They are the lifeline even in these changing market dynamics where the online medium is gradually gaining share and even here the partners play key role in its success. Our policy is quite clear in terms of working with our channel partners, they will remain our key associates in the Indian market. We are still in the early stage of business in India and are planning to go with the time tested and proven market development activities like channel incentive programs, trainings to their sales teams, product reviews, In-store branding etc. We also take feedback from our partners and are open to ideas that can result in direct sales to our partners.”
Joyce Ray, India Business Head of Tally Solutions Pvt. Ltd said, “In the last 3 decades, our services to small and medium businesses in India have been directly led by our channel partners. At Tally, we have been extremely fortunate that our partners have single-handedly and with tremendous dedication and sincerity taken the task of automating accounting for these businesses upon themselves. All through last year, our partners through the medium of direct contact, electronic communication and reach-out programs, educated more than half a million businesses on GST and ushered lakhs of businesses into the era of GST invoicing, accounting and compliance. It is a matter of great pride for us that our customers have maintained a long relationship with our partners and have also shown affection and gratitude towards the services that our partners have provided. I am confident that the next decade will see our partners evolving their businesses more and more to service greater numbers of small and medium enterprises – with Tally, its products and its services. We see our partners as organizations which are dedicated to drive customer satisfaction. We have an extensive training and enablement structure, which is provided both in-house and through our Tally Xcelerator partners, to ensure the right capabilities are delivered cohesively across the country. We have various classifications of partner organizations depending on the level of complexity of the customers that they service. Such partners form the part of the Certified Partner network of Tally and we currently have a reach which is present in over 500 districts of the country.”
“Partnerships play an important role for any businesses to grow. As such, it is important to engage your partners at all levels and build relationships that value what each party brings to the table. For Ziox, we are a very Channel friendly company and believe in growing with the right partners. We firmly believe that Channel partners play a significant role in our growth, as they contribute to the Brand image and allow maximised reach. Currently we have over 1000+ Channel partners across both key and upmarket cities in India. As against the Industry which has opted for online route, we at Ziox believe in the strength of Channel partners and from the day of inception have worked closely with the Offline Channel. Our partners’ loyalty is an integral piece to our success as a business, and we’re constantly striving to improve our offering of support, incentives and resources to help our partners to grow hand in hand. Our specialized reward programs, training, comp. margins so as to motivate them, educate them on the latest happenings keeping them in sync with the ongoing trends keeps them involved to build a WIN – WIN situation for both the parties” says Deepak Kabu, CEO, Ziox Mobiles.
Ashish Mutneja, CEO, Quantum Hi tech commented, “We are a very channel friendly brand & we strongly believe in growing with the Channel Partners. We have optimized a rich partner ecosystem consisting of 2500 partners across 20 states in India. The Indian market is volatile and the sheer size makes it a good business place for channel partners. We understand their involvement and have our initiatives and promotional drives placed in such a way that it becomes a win-win situation for both. Very recently we have begun the ‘Club Premier’ which is one of the largest and most engaging programs we have initiated to build a strong association with key channel partners. Over and above we do run several reward programs and incentives to heighten interest among channel partners about our offerings which in turn brings great results in terms of sales, strengthening the bottom lines of the vendor and the channel partner. Also on time to time basis, we conduct training programs, to upgrade them and keep them informed on latest technologies/developments of the Industry and our Brand so as to sync them with the product offerings. To drive the program, we also run several Training incentives so as to keep them motivated.We also support our partners by adopting the new technologies that cater the trend-oriented customer behaviour and expectations. On the course, our collaborated channels help us to reach out to the consumers more effectively. With the help of our channel partners, today, Quantum today enjoys a strong dominance across the regions. Since we are consistently improving our offerings, in terms of support, incentives and resources, we have progressed exponentially in a tandem, hand in hand.”
Opportunities for Channel Partners
IT industry has been flourishing very well and it has gained quite good momentum in past couple of years. New innovations are creating several opportunities for channel partners to grow their business and have more and more customers. Brands give a brief overview about all the opportunities present in market.
“In the past few years, Indian IT channel has evolved and innovated business models to sustain in the competition. New opportunities like gaming, entertainment, mixed reality etc are growth drivers in the coming years and add more value to their existing business model” says Chandrahas Panigrahi, CMO and Consumer Business Head of Acer India.“Collaborating with brand for exclusive stores, working to create a cloud-based platform, focusing on pricing and brand exclusivity are the key elements that can channel partners to add more value to their business. In the coming years, these factors will help channel partners to form a One Stop Solution provider.”
Bijoy Alaylo, General Manager – SOHO Sales, TP-Link India says, “Channel today is comprised of value added selling. Just Trading is a thing of the past and those who can provide solution along with it will persist for a long duration. With the e-commerce space getting more and more opportunities to sell the product and experiment various methods to expand the business there has been a big opportunity up for grab to all.”
Sudhir Singh, MD, Marg Compusoft commented, “Marg ERP is a company which is high on values. We believe in hardwork and appreciate that as well. We are giving 40% margin to become MMP and if you join us as a MP, we give them a discount of 15% on the product value as per our new Vistaar program. The Vistaar program is the latest marketing program initiation taken by Marg ERP Ltd. to connect to more and more partners all over the country.”
“Channel Partners can sell more by joining hands to provide the consumer with the better technological products by understanding their requirement. Also with the rise of IOT and smart home categories, our channel partners will have better opportunity to sell out Dual Band and Mesh unit routers which can in return give them greater profit margin” added Frank Rao, Director, Tenda & IP-COM Business India.
Vishal Parekh, Marketing Director, Kingston Technology & HyperX – India added, “Kingston is globally recognized as the largest independent manufacturer of memory products and has its operations in multiple countries. The brand has developed deep understanding and knowledge of market trends in different regions that helps our channel partners to adapt with rapidly changing market trends. It is an essential part of our channel strategy to work closely with channel partners to achieve scale necessary to compete in the market. Even from business point of view, there are new avenues like Cloud Computing, Gaming, IoT and Digitization of institutions that will play an important role.”
Manoj Kumar Pansari, CEO, Astrum Holdings Ltd. said, “Channel partners have for over the years been the delivery mechanism for all brands. I guess this role that they play will continue to grow in the coming years as more and more brands are making a beeline to India. In addition to this there is a new breed of partners evolving with a focus on the Online Marketplaces. More specific to Astrum the value of our partners have been constantly on the rise in our overall business landscape as we aspire to reach out into more and more territories within India. Hence channel partners with a focus and skills to do consistent work on market development are always in dearth and would always be in demand.”
“We try to give our channel partners as much opportunity as we can, so it’s a win-win situation for both channel and the company. Apart from regular schemes for our channel partners, which in turn helps them indirectly with prices and sales, we are also going very aggressive in service support. Service support also helps the channel as well as end consumers. We also take feedback from channel and take action on them. Lot of products have been launched, modified or improved because of channel feedback. Even with strict quality and value for money prices we make sure channel gets good margins for the efforts they put. If the company is a vehicle, the channel partners are like wheels which help the company/brand move forward. We are known for our EQR mantra that is (Excellence, Quality and Reliability) which no other brand has and the extensive range and the line of products that we have to offer is tremendous in every category” added Rajesh Doshi, Director, Zebronics India Pvt. Ltd.
“Channel and principals like us should make product presentation more attractive and attention drawing so that the end user is attracted to our offerings. This makes selling easier for retailers. Ease of doing after sales support must be continuously improved by using technology” commented Jasmeet Singh Sethi, Director, Portronics Digital Pvt. Ltd.
“The emerging opportunities for the channel partners are our regular introduction of new models or different segments of product portfolio like solar etc.” added Manoj Jain, VP, Microtek International Pvt. Ltd.
“We would like to develop a focused and dedicated partner base and enable them to acquire new customers while ensuring existing customers’ loyalty is maintained. We want to play to the need of market, which means we won’t overcrowd the market with our partners. Hence, we need serious partners, who are loyal. We also plan to kick start partner training programs to create a community of channel partners that complement our tech support and provide on the ground support to our customers, furthering our reach and exposure” said, Shrenik Bhayani, General Manager, Kaspersky Lab (South Asia).
Mukesh Chaudhary, Country Head-India, SAARC & ME, RAPOO Technologies India Pvt. Ltd. commented, “The style of doing business is experiencing changes day by day, so the channel community needs to understand the same and accordingly, they have to come up with innovative ways to bring customers to their store. This can be done, by giving customers, more confidence, more satisfaction and offering solutions rather than merely box products. In the near future, we will see lot of surge in IOT products so our partners should be ready to grab that opportunity which would otherwise benefit mostly the e-commerce platform partners.”
Mandar Joshi, Head Channel Business, DIGISOL Systems Ltd added “As a regular activity, this year also we will undertake events for our channel community, where we will be having 1:1 interaction with our channel partners. We also actively participate in the trade shows, expos, etc. Apart from these, we will also aggressively promote in-shop branding. We will regularly connect ourselves with our partners who have been selling our products through regular marketing updates and marketing brochures. Apart from these we conduct many training sessions to help upgrade their skills.”
Altaf Ansari, Regional Business Manager, PhotoFast stated, “The consumer behaviour is changing quite rapidly since a last few years with the increase in smartphone usage &internet bandwidth. It is very important to understand this behaviour and adapt to their needs and give them solutions based on their changing demands. So for channel partners, it is very important to start diversifying their offerings to the consumers and keep changing it to match the consumers’ taste with time. Besides, it makes sense to have an online presence for them where they get a nationwide footprint and still do business without hassles, especially with the GST in place now. They can achieve this by becoming a seller on an online marketplace or have their own micro-portal where they can offer customised services to their customers for better customer experience.”
Joyce Ray, India Business Head of Tally Solutions Pvt. Ltd said, “With the onset of GST and digital payment services, businesses are undergoing a vast and complex transformation. This transformation not only includes the way businesses will comply and deal with other businesses, but also how they will avail banking services, manage their accounts, receivables and payables. In short, every single aspect of a business is expected to be impacted in times to come. The process of learning and self-adoption has only started. In the last 9-10 months, ever since GST has got implemented we have seen more than 5000 of our partners proactively adopting GST for doing their own business. This is an extremely encouraging sign. Going forward, with the launch of Release of 7.0 towards the second half of the year, I am confident that our partners will be able to bring the story of connected services to their customers and ensure that the next decade of digitization is secured.”
Deepak Kabu, CEO, Ziox Mobiles commented, “The vast majority of partners see themselves in a state of transformation, realizing that as the industry evolves, so too must the channel landscape. As channel partners mull over business moves for the upcoming year, we consider IoT as a potential play — and for good reason. IOT shall bring in new opportunities along with balanced problems to address.”
“Technology is a bloom that has favoured a number of growth opportunities, such as increased IoT based solutions are in huge demand. Since existing businesses are dominant on the offline route and have their roots dug deep as well, IoT will is the first step where businesses with the help of channel partners can create a healthy online presence as well. Besides technology, channel partners see themselves in a state of transformation realizing that as the industry evolves the channel landscape too will progress. Narrowing down to Quantum, the overall business landscape has also reflected the uplift in terms of our reach across the country. We have witnessed that Post GST the expansion of partners is limitless. Direct sales to varied regions; have opened up unimaginable opportunities ahead. Moreover, service support by channel partners adds a great value” added Ashish Mutneja, CEO, Quantum Hi tech.
Challenges for Partner Community
Channel Partners are the perfect way to enhance your reach in the market and grow your sales but there are a lot of challenges that creates difficulties and restrict them to do the same. Channel partners need complete support and power to get over it so that they can run business smoothly. Below are the opinions of industry leaders that can explain the scenario in a good way.
Chandrahas Panigrahi, CMO and Consumer Business Head of Acer India says, “I believe that customer analytics and data driven intelligence will play a bigger role even in retail sales just like e-comm. It is important that partners stay abreast of technology shifts happening in the industry and customer expectations as retail plays a huge role in last mile reach, customer experience and informed buying process for any brand.”
“What comes as a boon also brings consequences along with it. Online is a good thing but also sometimes when they burn money during offer days it is difficult for channel partners to justify to their customers. This is a challenge being faced from a long time which the whole industry is trying to balance. Even the regular changes in GST slabs plus every changing structure in logistics due to government regulations is causing confusion to the partners. Hope so we see 2018 getting the business back to normal and growing many folds” said Bijoy Alaylo, General Manager – SOHO Sales, TP-Link India.
Sudhir Singh, MD, Marg Compusoft stated, “The major challenges which channel partners are facing is to provide our user base with Marg software knowledge at one go, which is not possible and moreover every business is looking for a customized software as per their business requirement at one go as it is a vast software and needs regular training. It is a very tough task for every partner as well to understand each and every technicality of the product especially when it has been modified to suit the customer’s taste and choice. Customer satisfaction is important and most valued at Marg ERP, hence we try our best to train our partners and customers always.”
Frank Rao, Director, Tenda & IP-COM Business India commented, “Although revolutionary, new government policies have seemed to slow down the market every now and then. Partners find it hard to adapt to new policies instantly, which inadvertently is affecting their sales-out capability in the market. The speed breaker in cash flow throughout market has slowed down the traditional business process for partner leading them to adapt to the new procedure with a pause to understand it correctly.”
Vishal Parekh, Marketing Director, Kingston Technology & HyperX – India commented, “With the Technology and Storage industry showing a steady growth in India, the potential is huge as the Indian market is vast. The challenge we have faced is reaching the wide geographies of the country to cater to the demand but the advent of online business getting stronger, we see a bright future. Other than that, we see partners struggling due to their lack of product and market knowledge. If they are from our partner network, we would like to help them out to understand our products and get them in touch with right sales personnel.”
Manoj Kumar Pansari, CEO, Astrum Holdings Ltd added, “Channel partners essentially help the brand for better penetration in the local market and establishing a wider outreach. In terms of Challenges, some key concerns include–Aligning business goals between you and your partners, &Partners offering competing products which cannot be controlled. Next being though they work for you, they are 100% independent entities hence one needs to try to leverage the power you have. Lastly, the changing buyer behaviour, wherein most buyers are independent researchers and not dependent on third parties, which makes it essential to establish in bound content Marketing and Training.”
Rajesh Doshi, Director, Zebronics India Pvt Ltd commented, “There are challenges in every industry, if there is no challenge you can be certain that there is no growth, but with time the old ones are addressed with and a new set of challenges appear. The current online segment is a challenge for channel partners but they’re slowly finding their way and things are getting settled. When it comes to sound systems, models across all categories are large that the look feel and demo is really important for the consumer before buying. This is only made possible by channel partners, also, if you note the market is getting streamlined but in case products is available both online and offline we try our best to ensure and control the pricing so that there is no disadvantage for our offline channel partners.”
“Competition from other channels likes online and undercutting within the industry are some of the key challenges” said Jasmeet Singh Sethi, Director, Portronics Digital Pvt. Ltd.
“Major Challenge for the channel partner is to maintain his margin because of huge competition” said, Manoj Jain, VP, Microtek International Pvt. Ltd.
Shrenik Bhayani, General Manager, Kaspersky Lab (South Asia) stated, “There are many IT / Networking channel partners who are not focused on cyber security want to be part of this growing industry and we will help them build the business plan and enable them to deliver quality solutions to their end customers. We would like to develop a focused and dedicated partner base and enable them to acquire new customers while ensuring existing customers’ loyalty is maintained. We want to play to the need of market, which means we won’t overcrowd the market with our partners. Hence, we need serious partners, who are loyal.”
Mukesh Chaudhary, Country Head-India, SAARC & ME, RAPOO Technologies India Pvt. Ltd. added “A major challenge is to win the confidence of customers in terms of giving quality products with better price and better service. The other challenge that partners, according to me, need to address is that they need to bring more creativity in their selling style as well as select innovative products to address their customers’ demands.”
Mandar Joshi, Head Channel Business, DIGISOL Systems Ltd. said, “We have a major portion of our marketing funds for Trainings and Seminar which helps the Channel to understand these markets and be technically qualified for offering these solutions. DIGISOL invests considerably in training and empowering their channel partners to build their own technical expertise as well as enhance the DIGISOL’s brand positioning and visibility in the industry. Sound market knowledge and in-depth understanding is helping us to emerge as a front runner in delivering end-to-end products to customers covering a broad spectrum in SOHOs and SMEs.”
“The pricing disparity between online & offline channel (though it has come down) still poses a big problem to the channel partners. The consumers tend to move towards online channel due to them being spoilt for choice with a wide range of products to choose from, up-to-door service and ease of transaction. The channel partners can turn it into an opportunity, by not only providing the consumers the offline experience of touch &feel, but also getting themselves online and serving those consumers who prefer to shop from the comfort of their home” added Altaf Ansari, Regional Business Manager, PhotoFast.
“While digitization has opened a plethora of opportunities for partners, it is important to pay heed to the challenges that come along. Deviation from the normal practices can seem challenging, but the way we see it, there are 2 choices: use this opportunity to drive change in behaviour or wait for businesses to change themselves. I believe that as part of the Tally family, all our partners have taken it upon themselves to impact the way businesses adopt digital methods of running their respective enterprises. The task ahead for channel partners would be related to developing quality teams, hiring suitable manpower, understanding the vast and ever-evolving digital space, guiding their customers to adopt cutting edge technologies and grasping the overall implications of doing so” said Joyce Ray, India Business Head of Tally Solutions Pvt. Ltd.
Deepak Kabu, CEO, Ziox Mobiles said, “Some key challenges includes –Right knowledge among Channel papers to assure meeting right expectations to be good brand ambassadors for the Brand. Furthermore, Organizations can’t simply deliver one time training and expect the partnership to move smoothly. Channel partners not only need marketing material, product training and incentives to be motivated to move your products, but they also need a constant source of engagement to maintain motivation. The biggest challenge remains is ‘Partner Conflicts’ with multiple partner channels selling the same product or service, conflicts are inevitable without the right procedures in place. Organizations need to prevent conflicts and unnecessary competition amongst channel partners. Providing each partner with a custom domain or territory so that no conflicts should occur in terms of area , product and price. Just like any aspect of sales, partner channels need to be continually evaluated to make sure you’re reaching your goals.”
“Conflict of Interest is one of the key challenges, with multiple partner channels selling the same product or service, conflicts are inevitable without the right procedures in place. Lack of Knowledge about the products and Technology which in turn focuses only on the ‘final buy’. Also, the major challenge for the channel partners is aligning business goals which include the right knowledge among channel partners to assure meeting right expectations or to portray being a good ambassador for the brand. Flipping the coin to the organizations; the organizations that cannot simply deliver one-time training and expect the partnership to move smoothly, is also a challenge. Likewise, partner channels need to be continually evaluated to make sure they are on the right way to reach their goals. Competitiveness has been another issue, caused due to e-commerce has reduced margins significantly. Usually, consumers select products from their nearby retailers and immediately also reconsider the prices on the online platform thereby increasing their bargaining power” commented Ashish Mutneja, CEO, Quantum Hi tech.
Channel Business: Encouraging Growing Sentiments
A business often goes through different circumstances and being flexible gives power to be alive in the market. Channel partners have also managed always to grow further despite all challenges. “Rashi Peripherals has been maintaining double-digit growth for the last 28 years and we expect the same growth to continue in the upcoming years. However, the overall market is not growing at the same speed and competition is also getting fierce. Thus, we need to have proper strategies and plans in place to overcome these challenges and maintain our growth momentum” said Rajesh Goenka, Vice President, Sales and Marketing, Rashi Peripherals.
“The growth of IRIS in coming future shall come from Education Sectors. Primarily comprising Smart classes, Smart boards – Setting up Online Classroom, Online examination. Iris has done 10% revenue on this sector, we clearly see it can doubled / tripled touching 30 % in coming times” says Sanjiv Krishen, Chairman, Iris Computers. “The Second area is – E Governance. Smart Cities is big business with Wi-Fi and internet connectivity growing exponentially, Wi-Fi Internet connectivity of chosen villages and rural clusters, Railway Stations and more. Iris believes in Digital India initiatives and looks forward to help build a cashless society.
Commenting on the overall performance, Jagannath Patnaik, CEO, NNR IT Solutions says, “We are looking at expanding our horizon and concentrate on select Markets for some of our products , We want to focus primarily at Mumbai, Rest of Maharshtra, AP & Telangana, Punjab and Delhi, Bihar and Jharkhand geographically. We shall be adding some more brands and products besides AV segment. So we are looking at a growth of atleast 20-25% in next 2-3 years.”
DP Sinha, Managing Director, Graphline Computers Pvt. Ltd. says, “We see minimum business Growth of 20 to 25% in next two years. This is because of new product line which we have added in our portfolio. Especially ORACAL.”
“IT distribution is as dynamic as any other business and over the last couple of years the changes that have happened in this segment have been quite radical. These, in my opinion have been a reflection of the societal changes happening the country as well. But with some major policy decisions like implementation of GST and demonetisation way past more than a year now, the biz looks all set for a northward growth. With regard to our business – we have been observing a steady growth of around 20-25% YoY. As mentioned, with implementation of GST, the need for having local branches has been reduced and we have further streamlined our biz accordingly – which has not helped increase our bottom line but also has brought in more agility. We have also been focusing more on segments like Gaming, storage, Power etc. as a growth engine in the coming years” said Gopal Pansari, Director, Savera Marketing.
Krishna Raj Sharma, Director and CEO, iValue InfoSolutions Pvt. Ltd. commented, “iValue focus area of Data, Network and Application management (DNA of most businesses) is becoming increasingly pertinent in the Digital transformation journey of any customer across SMAC &IoT areas. Having engaged closely 2000+ CXO’s in addressing their business and IT challenge, the team has built tremendous expertise, engagement and equity across customer, partner and OEM eco system. Digital drive of the Government and DX initiative of most corporate hence has most relevance to iValue business which should help us accelerate our growth further in the coming years. Starting this year we have programs and initiatives to focus on new territory in India and abroad which is expected to accelerate growth.”
Sunil Srivastava, Director, Operations & Marketing, SARANI Retail & Marketing Pvt. Ltd. stated, “We at Sarani aim to have two-fold business growth in next coming years as this market has been flourishing dynamically and there are more chances that we can achieve all the set targets within planned timeframe.”
Major Obstacles for Distribution Business
“Major challenges are on how to extend credit to dealers/ partners – as order sizes are getting much bigger than older times. Earlier Rs 1 cr to 5 cr used to be regarded as big orders but now its 20 – 30 – 70 Cr orders are coming up as standard benchmarks and the partners dealer wants to go for it.The Partners are getting over leveraged while in each order their equity is much smaller than what they intend to garner from multiple channels – to feed into their orders, here lies the challenge of appropriating credit for them. We are planning to get higher limit for dealers / partners through NBFCs, help them / the partners get funding, focus on companies with larger bank limits and who can give LCs and Bank Guarantees” said Sanjiv Krishen, Chairman, Iris Computers.
Jagannath Patnaik, CEO, NNR IT Solutions stated the challenges, “The major challenge today is liquidity, the resellers and end users want more credit however the vendors need immediate payment. This is a major challenge, in addition to this there I lack of proper trained manpower and training. We are using our in house expertise to overcome this aspect.”
Rajesh Goenka, Vice President, Sales and Marketing, Rashi Peripherals added “Diversion of funds/finance to other short-term business opportunities and import of a lot of unofficial material in India without the authorized distribution network are the biggest hindrance to the growth of this industry. At the same time, we also see that new entrepreneurs and even employees are not joining the IT hardware trade as they do not see it as lucrative as it was in 5-10 years back.”
“Major Challenges was to detach material at multiple locations because of Road permit issue. Thanks to the Govt for implementing GST and because of that Road form issue resolved” said DP Sinha, Managing Director, Graphline Computers Pvt. Ltd.
Sunil Srivastava, Director, Operations & Marketing, SARANI Retail & Marketing Pvt. Ltd. commented, “Today it is very difficult to create business opportunities and leverage such opportunities to benefit business. Emergence of various brands have created a heavy price war among themselves. This leads to confusion among consumers who sometimes go for low price products to save some money. But such brands never provide better service support. This has hampered a lot as channel lose credibility in the market.”
Gopal Pansari, Director, Savera Marketing added “The major challenges today are proliferation of non-standardized brands all across the country. With government bringing in BIS certification couple of years back, this is proving to be an effective way to tackle the problem. Pricing is another critical factor in our segment where many a reseller play on price and thus compromising on the after sales services of the products. Availability of effective after sales service is another key area plaguing the industry.”
“Traditional distribution business has its own challenges. Thanks to our got to market where we work very closely with every stakeholder and community. Our close proximity to customers and channels has given us opportunity to understand and be ahead of the technology curve, which has helped us to come out of fee traditional challenges” said Krishna Raj Sharma, Director and CEO, iValue InfoSolutions Pvt. Ltd. Our constant expansion plans, adoptions of niche and new technologies have always kept us away from unexpected challenges and they have also helped us build differentiators.”
Suggestions for Brands
We received suggestions from key distribution business leaders which partners have highlighted during our conversation. Sanjiv Krishen, Chairman, Iris Computers, suggests, “Recommend longer CR limits from vendors / brands as earlier order payments used to come in 30 – 45 days this needs to increase to 90 days as Govt orders take a while for payments to be received atleast 90 days is good for now. The Vendors / Brands also need to Increase Upfront Margins rather than putting its a split as a low Front and a high back split this makes the deal attractive. With present times – the split of low upfront margin and higher back-end is practiced where as it should be in one shot – and right at the beginning while the order is booked this makes the deal attractive structured and worthwhile.”
Rajesh Goenka, Vice President, Sales and Marketing, Rashi Peripherals said, “Vendors should focus and keep trust on distributors who are working with them for long and should not indulge in over dumping the material just to achieve the quota. By avoiding such business practices, vendors will go a long way to improve business hygiene and profitability at all levels. Also, brands should invest more on demand generation and end customer training programs.”
Commenting on the top suggestion for brand, DP Sinha, Managing Director, Graphline Computers Pvt. Ltd.said, “Key Changes we will advise to our Vendors that they should work on timely delivery of material and stream line DOA process for replacement of Defective/damage material on arrival.”
Sunil Srivastava, Director, Operations & Marketing, SARANI Retail & Marketing Pvt. Ltd. said, “Vendors should heed of their distributors, retailers or resellers because they face lots of problems and in some cases they don’t even know how to tackle those problems. They should actively focus on the marketing of products and create awareness among customers aggressively. Also, they should take care of the timely delivery of orders and give better after sales service.”