The Hindu : Business : More PC sales move to organised sector

Online edition of India's National Newspaper
Wednesday, Feb 16, 2005

Business

Business

More PC sales move to organised sector

By Our Special Correspondent

NEW DELHI, FEB. 15. Despite the boom in the IT sector, local brands and IT exports are some areas that still continue to cause concern, as in the previous years, according to a study conducted by Skoch, a consultancy firm. While local brands were able to capture just 2 per cent additional market share in 2004 (from 20 per cent in 2003 to 22 per cent in 2004), new brands were able to get an additional 6 per cent and MNC brands another 11 per cent (from 23 per cent in 2003 to 34 per cent in 2004).

The reason for this is that local PC brands continue to offer indifferent service/products, which are not distinctly superior to what the grey market/MNCs have to offer. Local brands have not ramped up their distribution channels either. This will become a serious problem in 2005 as the zero import duty will make MNC brands even more competitive, indeed even the grey market will now turn legit this year and become even more competitive.

While much of the rise in PCs sales was, as in previous years, due to the lowering of prices following the cut in excise and customs duties, this also resulted in the organised sector capturing more market share from the grey market — during the year, an additional 6.5 lakh PCs moved to the organised sector. The share of the grey market fell from around 55-56 per cent over the last four to five years to just 38 per cent in 2004. The year also saw the emergence of new brands (LG, Millennium, GES, EPC and Vesta), which captured as much as 6 per cent of the market.

The boom in the PC market also resulted in consolidation of the move away from the country's metros. Till 2001, the six metros accounted for more than half the PCs sold in the country, and in 2004, the non-metros accounted for 53 per cent of all India sales.

The e-governance market rose 23 per cent and touched Rs. 2,200 crores spending. The impact of this, of course, was felt in terms of how delivery systems have improved in significant parts of rural India. Even rural India is giving thumbs up to e-governance initiatives such as the telemedicine project in West Bengal and Aarohi in Uttranchal. Even in a State like Assam, projects like `Government at the Doorstep' programme and `Rajiv Gandhi Computer Literacy Program' is touching tribal population in areas as remote as Majuli.

The report recommends that IT should play an important part in all citizen services delivery schemes. This would call for a massive business process re-engineering effort to shorten the chain of linkages between the government and the citizen. "Moving forward the PC penetration would significantly increase only if citizen services delivery is dramatically improved. Just two currently being discussed programmes such as introducing computers at the gram panchayat level and setting up of citizen services centres can yield induction of half a million additional PCs,'' says the report.

Printer friendly page
Send this article to Friends by E-Mail

Business