Rashis mobility products recorded 100% growth during the year. Some of the new principals added included SanDisk and Senao. While SanDisk is for storage products, it will distribute outdoor wireless solutions for the entire range of indoor and outdoor wireless solutions from Senao. Rashi launched Digital Vision 2006 & Beyond, a 40 city program aimed at conveying the concept of digital convergence. It added ten more locations last year in an effort to expand its network. Iris Computers registered revenues of Rs 572 crore with growth of 20% over the last year. Raritan, a leading supplier of technology solutions appointed Iris as its distributor for its IT infrastructure management solution. It was a good year for SES Technologies. The company managed to become the distributor for Foxconn and ASUS Tech. Other players who could not make it to the top 10 distribution list also did business on expected linesPriya, Mediaman, and Jupiter International.

Life after Large Format Retail?
Large format stores (LFRs) was considered an emerging segment, but there was very little addition in the total number of such stores, which remained confined to four metros. However, there were some indicators during the year of vendors directly tying up with these stores: Canon has put a team in place to manage these new relationships. It entered into an agreement with Reliance, Croma, Metro, E-zone and Next. The company also announced plans to tie up with twenty-five national chains and fifty regional chains by the end of 2007. Similarly, Korean major LG put in place a Modern Business division exclusively intended to target large retail stores and malls for its IT products. eSys is also reported to have set up a10-member team to explore the new opportunities.

Becoming IT Savvy
After selling high tech products to enterprises, some tier-2 distributors started looking at implementing IT at their offices. Rashi Peripherals reportedly spent over Rs 1 crore to implement ERP to streamline its business. Savex and Neoteric followed suit.

Dampeners of the Year
One area of deep concern for distributors was non-uniformity of applicable tax rates for products across different states. This resulted in substantial confusion in certain product lines. The industry expects rationalization of VAT rates. Despite all the talks of growth of e-commerce in India, online product sales remain miniscule and more of a discount-play. Distributors showed little interest in this relatively new avenue. The gaming segment could not make much headway despite distributors like Redington tying up with Microsoft for its popular Xbox. And finally, distributors continued to face declining margins, resulting in reduced profitability.

Sudesh Prasad
sudeshp@cybermedia.co.in

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