Contrary to expectations, Compaq expects to close the year with a healthy 10 to 15 per cent growth from its India operations, over last year.
"We did about Rs 1,500 crore business in the previous fiscal and hope to end this year with a 10 to 15 per cent growth," Ravi Swaminathan, director of Compaq's Access Business Group and head of its India operations, said. He, however, admitted to a slowdown, but said Compaq was among "very few corporates which had witnessed a growth in both volume and value terms."
Swaminathan said the IT industry had high hopes from the Union budget and expected finance minister Yashwant Sinha to present a budget which would help kickstart the economy. He said the hardware sector had persistently been complaining of less recognition than the software sector.
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"We hope the government will correct this anomaly this year," he said. Swaminathan said the sector was looking for a reduction in excise and customs so that computers become less expensive.
On the issue of Compaq recently favouring direct sales to routing products through channel partners, Swaminathan said the ratio of direct sales to the traditional distribution channel varies from market to market. He said direct sales were much stronger in the US, but difficult in India. "The geography here is challenging and, moreover, the customer requires handholding in India which a channel partner can do," he said.
Swaminathan said the "see, touch and feel" factors contributed in a big way in the customer's purchase decision. He said Compaq would "predominantly be doing channel business, but providing direct information if the customer so desired." In the next 3-5 years, he said, Compaq still saw itself doing 70 to 80 per cent of business through the channel network.
Defending the pricing of Compaq products, Swaminathan said the company believed in giving "value for money". He said the company will continue to be available on a premium over the assembled market. "Cheap products have a smaller life and can be replaced by cheap products tomorrow. The product which gives the best support is the one that will stay in the emerging scenario," he said.
He said the company actually gave more than what it charged for in the form of a reputed brand, assured service, quality peripherals, more warranties and licensed software. He said the pricing was competitive compared with original Korean and Japanese manufactured models. "The assembled market uses a bit of this and a bit of that and against them Compaq will always be at a premium," he added.