Money pulling – the add-on way
At a time when margins are going down – channels have started to move towards the Add-On way in order to increase profiting ways
With expansion of market reach and coupled with opening of segments like the home or the small and medium sized businesses – the add-on business is suddenly catching the eyeballs of the channel community.
No matter how complete a home PC bundle may be, the world of PC peripherals presents a lot of enticing add-ons. CD burners, digital cameras, scanners – the list goes on and on. In every category, there are dozens, sometime even hundreds – of options. With an eye on bang for the buck (after all, you presumably just gave in about Rs 20,000 for a PC), few products on the lines of peripherals are giving consumers the extra features and fun factor to round out home PC experience.
Not only home segment it’s the small businesses today that use a growing array of peripherals with their PCs. For channel oriented players and even software providers, this means an expanding opportunity to capitalize on new capabilities while designing programs for segments like small businesses or even the home sector.
Of particular interest is the growing availability of products like webcams digicams or MP3 players. A lot of PC owners are now looking beyond just vanilla peripherals and are moving towards getting these products in order either to make a fashion statement or just to be different.
Taking a cue from the market dynamics – certain players of the channel community are trying their best to address this area. “We are well aware of the increased margin situation in this segment. We are dealing with Snazio products in this region and have our resellers firmly entrenched in states like Punjab, Haryana and UP as well,” informed, Vikas Dogra, Director at Neo Peripherals.
Multimedia capabilities are also being used by about half of small businesses, although penetration is a bit lower among firms with under five employees. More sophisticated audio will be appreciated by small businesses, as many also use multimedia machines at home for entertainment purposes, all this is leading towards better adoption level of high-end peripherals like optical mice, jazzy keyboards or even peppy MP3 players. “We are having healthy margins of about 10 per cent in this segment. Moving forward we would be focussing more towards lifestyle products,” explains, Dogra.
Peripherals sidewalk the sales
Digicams is one promising area where there is a lot of activity when it comes to channels. “We feel that it is one of those areas where the growth margins are going to be on the higher side. Changing customer needs are driving this segment towards higher margins and channels are gearing up to cater to this segment well,” informed, Pankaj Bandlish, Director at Compro Computers.
Digital cameras are in these days and channels are rightly riding high on this wave of add-ons. “The overall business of add-on presents one of the most profitable segments in this industry. We have seen how the typical computer-buying scenario has changed or evolved over the past couple of years. A PC is no more – just a computer. It is becoming a fashion statement now,” explained, Amit Kedia, Director, Shree Sagarmatha Distributors.
Customer’s lust towards attractive gadgets is driving companies like Shree Sagarmatha to increase the bouquet of products that it is dealing into. “Presently, we are dealing with more than 100 products, under Tech-Com name. We have products from accessories for notebook segment to optical mice or card readers etc. The overall business prospect for this segment is quite bright and that’s why a lot of players have entered towards this,” he added.
With home media segment opening up in smaller towns as well, households are buying products like digital video cameras, MP3 players or even CDROMs. When it comes to adding USB ports, a PC has limited expansion capability and many of the home PCs average about two to four USB ports – a seven-port USB hub, is a great way to expand the number of peripherals for a computer.
“It’s all a demand generation game. When our customers want more out of a PC they are asking us to deliver more from the peripherals point of view,” Kedia informed.