Hardware Business in the Non-Metro Cities due to Lockdown

The hardware business during lockdown and after it has seen some peculiar characteristics. Because of the work from home system, there was a surge in the demand of hardware, especially of video conferencing equipments and of laptops. This meant that there was a shortage of laptop stocks, as companies couldn't manufacture them at the fast pace of demands. This created a rise in the price of laptops - according to an estimate, laptops which were earlier easily available in the 20-25 K range, are now available in the 32-38 K range and are often not available in the market even at this price.

China Factor

Offline hardware resellers have been feeling that the E-commerce platforms have been taking all the existing stocks. But a quick check of the E-commerce platforms shows that affordable laptops which were easily available in many ranges are simply not available even on E-commerce platforms.  Middle-class to upper middle class buyers simply can't afford the highly priced laptops available on the E-commerce websites. To complicate matters further, the chips that are used in laptops and are manufactured in China are in deep shortage because China was reported to hoard a large number of chips to meet the shortage of chips in the markets and the manufacturing of chips declined in China because of lockdown. Further, the Indo-China border conflict and strict lockdown declined the export of hardware from China to India. This further complicated the laptop supplies. Now, some companies have revamped and increased their manufacture of most laptop parts in India, so that they can supply laptops to the Indian market. However, most companies are still importing laptops and hence, the shortage of laptops in India continues.

Positive Impact of Cloud

The positive effect of all this was that the hardware resellers were able to finish their stocks at higher rates and could make a profit. This especially the case in the non-metro cities.

MP Vijayan of Sun Computers at Palakkad attests to this by saying that the prices increased three times and the demand also rose. He cites the growth of Cloud business as a cause for further raising the demand of laptops, as the need for hardware platform to host the cloud operation rose.

“There was a huge demand during the past one year because of the lockdown with the sudden cloud adaptation and the sales have increased three time business now due to this demand. We are mainly focused on Asus products and there has been steady sales happening”.

--Vijayan M P, Owner, Sun Computers, Palakkad

Need To Move Online

Even before the lockdown E-commerce model was greatly lapped up by the Indian consumers. Lockdown made it imperative for them to order their gadgets online. This worked for them and for the small resellers who have onboarded the E-commerce platforms. We must remember that the E-commerce platforms are not exactly supplying the gadgets. They are merely providing a digital platform for the small resellers of India and providing them the logistic support of picking up the order and delivering it at the doorstep of the consumer. This is actually a profitable situation for the resellers and small manufacturers, who can't build a massive platform and drive millions of traffic on it to be able to capture customers.

Some hardware resellers have stuck to the old offline model, which is phasing out now with the advance of technology. And they are the ones who are suffering the most. However, a research online shows that most resellers have at least a profile on Indiamart, which is another digital platform which showcases the hardware and gets millions of traffic daily. Similarly, most resellers are listed on Google Business. So, it's not as if the resellers are not moving online. Large numbers of them are already online on some large digital platforms. Now, they have to make the final move and create profiles on the E-commerce platforms and avail benefits of this technology. Many of them are already there, but they have to integrate their online profile with their hardware stores and build a strong presence online so that they are able to capture their customers online.

Nex P Antony, MD, Forerun Computers & Systems at Kochi admits that the prices of hardware rose during lockdown and even after the lockdown has been lifted, people are still buying online.

“The average pricing for the equipment was changed because of the demand. Thirty to forty percent of the sales are still going on online. Compared to the first lockdown we have got a ten percent growth after this pandemic. Only about five percent of the profit is able to take up. Now if we see, everything is back to normal and the offline mode of working is slowly coming back. This change should convert everything back to normal”.

--Nex P Antony, MD, Forerun Computers and Systems, Kochi

“Our business has increased during the past the one year because there was so much demand during the time of the lockdown. This was because of work from home cultures from IT sectors, increase in gaming technology and so on. The sudden migration to the online platform has increased our sales because people are more dependent on digital sources nowadays”.

--Jiju C Jobson, CEO, Geeks Systems, Thrissur

This is especially true of non-metro areas in Kerala, Maharashtra, Tamil Nadu, Orissa and Meghalaya where fresh Corona cases keep on coming in large numbers daily and the consumers can't be expected to come out and buy their goods offline. Hence, a more sagacious strategy for the resellers would be to build a strong presence online and capture their customers online rather than expecting them to come to offline stores.

Jiju C Jobson, CEO, Geeks Systems, Thrissur attests to the advantages of migration to digital platforms and says that his sales increased because of an online presence.

By talking to some hardware resellers it is obvious that in the non-metro areas, the hardware business has increased in the last one and a half years or so, although for some time they might have faced a shortage in supplies which may still be continuing in many non-metro areas. Further, rise in techs such as Cloud, as-a-service platforms, gaming etc have given a boost to the computer business in the non-metro areas. Moving online is tremendously beneficial to them and they stand to gain from building a strong profile online.

By Dr Archana Verma, Editor, DQ Channels | Vishal SS, Freelance Contributor, DQ Channels

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