-Samrita Baruah
Market dynamics is something that can never be predicted. While a number of factors come into play, but one of the many factors that impacts this market dynamics is the consumer behaviour, which results in the fluctuation of the demand and supply of a certain product or service.
The Rajasthan IT market is somewhat going through a similar phase now. With the channel fraternity fretting about dwindling sales because of low demand, speaking to a few of these partners brought to light many aspects that continue to impact this market.
INFLATION & CONFLICTING CONSUMER BEHAVIOUR
Arvind Modi
“Sales were picking up after the pandemic, but starting April it has gone down again,” says Arvind Modi, Owner – Bits & Bytes. “Owing to this the market has gone down again. One of the main reasons for this slowdown is the decline in customer demand. Domestic factors like rising inflation, lack of funds on part of consumers to spend on IT and to some extent shortage of material are responsible for it. As a result, the industry, both commercial and consumer market is down by 30-40%.”
This slow demand has also led many IT projects to be stalled for the time being. System integrators are also not picking up any projects for the fear of getting their payments stuck.
“The present Gehlot government is also not investing much on technology and egovernance projects, but rather spending it on public utility projects. So in a way it is a dull period for the tech market in the state at present,” Arvind adds.
Ashish Deedwania, Owner – Arsh Vision shares a somewhat similar perspective. According to him, in tier 2, 3 markets like Ajmer, there is a big supply of IT products but lack of demand has impacted businesses largely. “However, it depends on the kind of products you are dealing with. Like if you take printers, there is a huge demand for them but there is a big gap on the supply side.”
Ashish believes that with the minimum standard of living going up in these cities, the purchasing power for IT products has relatively gone down.
Manish Aggarwal
Throwing more light on the ongoing demand-supply fluctuations, Manish Agarwal, Owner – Krishna Compusoft agrees that both the consumer and the commercial product line has a different story. “In case of consumer products, laptops, or desktops are available in huge quantity but the demand is relatively less. However, demand for Commercial products like high-end laptops or printers is there but lack of supply is impacting the business,” he explains.
Manish further contends that when it comes to purchasing an IT product, consumers seem to get very confused whether to get it from a distributor or any retail store. “And the reason for this is the misleading advertisement campaigns that big multi-retail stores or LFRs put up that often confuses the customer and disorient them. For instance, the laptops we are offering with i3 processor start from INR 38,000 – 39,000. In the advertisements printed, retail stores will show that they are offering these same laptops for INR 31,999 with additional 10% discount but they will not mention the stats or the product features in it. So customers fail to differentiate there of what we are offering and what these retail chains are giving.”
BREAKING THE CHAIN SYSTEM
Manish further points out that where there used to be a chain system in which vendors used to sell their products to sub-distributors or regional distributors who in turn would sell to retailers and resellers, but owing to a change in policy vendors are now going directly to retailers, thus breaking the whole chain system. “It is still in the experimental phase and only time will say if vendors would like to bill directly to retailers or continue with the previous pattern of going through RDs.”
LACK OF SKILLED MANPOWER
Lalit Choudhary
Lalit Choudhary, Director – Aadhar Infonet explains that the market scenario has completely changed after the pandemic for a market like Jaipur, which is the main IT hub in Rajasthan. During the pandemic, while there had been a consistent demand for consumer IT products, the shortage in supply have led to vendors selling these items above their MRP. But Lalit cites lack of manpower as the main issue of concern now. “Leave aside the demand and supply hurdle, we are facing lack of efficient product managers as the major challenge now. Vendors are now on a retail expansion spree post pandemic and are opening their exclusive stores to broaden their reach. Employees who were previously working for a distributor are now flocking to these vendors on a much higher salary scale,” he explains.
Though ecommerce does not pose as much a challenge to the channel business now like before, Lalit mentions that in case of certain products like anti-virus, customers happen to buy or update their software online and this largely impacts the security software business of distributors.
THRIVING REFURBISHED MARKET
However, the one market that is thriving at the moment is the second hand or the refurbished IT goods market. Though this market has been thriving for the last 4-5 years, there are several players in this space who are building a profitable business around it. “I know a couple of these players who have set up factories in metros, import second hand material in bulk, source the extra RAM & hard disk and also give extended warranty on these refurbished products,” explains Arvind of Bits & Bytes.
Besides, the rental market for IT products has also come up as another profitable business model for many partners. Commercial customers are increasingly opting for such products on rent or lease to meet their IT requirements that also impact their Capex in the long run.
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