Leading The Pack In Northeast

Over the years, IT retail has seen a phase of broad dissemination of markets
across East India leading to the development of spread-out markets particularly
in West Bengal, Orissa and Bihar. However, this is not the case in northeast.
Despite the diffused markets in the East, northeast India has undergone a phase
of consolidation of the IT retail market based in Guwahati.

The state capital of Assam, Guwahati has long been catering to the market
demands throughout the entire northeast region. Despite the competitive market
in Agartala and Tripura, Guwahati has evolved into the business center of the
entire northeast region. After the telecom industry, it is the IT sector that
has been growing steadily in the region primarily because of the thriving
oil-industry. It is helped by government sector investing in IT in the form of
retail purchases.

“Guwahati market not only caters to Assam, but the seven states as well.
Backed by the emergence of the SOHO segment and an organised channel community,
Guwahati is one of the crucial players in the entire East. In Tripura, most of
the stock comes from Guwahati,” said Subhash Modak, CEO, Computer Link,
highlighting the importance of Guwahati.

Backed by the strong presence of the government sector accounting as the
primary business client for IT retail in the region, a strong and consistent
end-user base has come into play recently since the last two years. With the
region becoming computer savvy with the expansion of IT training institutes,
Guwahati has started to develop at a steady 17 percent growth on a YoY basis.

Guwahati's uniqueness lies in catering to the local markets in Tripura,
Nagaland, Mizoram and Manipur.

Guwahati

FACT FILE Market size is 10,000 PCs per month IT market growing at a rate of 30% YoY

“Guwahati is the nerve center for IT retail in northeastern India. The market
caters to all the seven states in the region. However, this year, it has gone
down at a negative ratio because of the global slowdown and the pertinent
political problem, but it is a temporary phenomenon and will recover soon by mid
2009,” said GC Biswas, CEO, SD Infotech.

Having a strong presence of national distributors in Guwahati, the area is
under constant supervision by Rashi Peripherals, Ingram Micro and Redington.
Unlike other upcountry markets in the East, the distributors have a strong
supply base and a stretched supply line in Guwahati with three national
distributors having warehouses in the city, resulting in the bulk of the trade
taking place from this region.

“Guwahati has the potential to develop as a big market for IT retail. Even in
times when sales were down in the entire country especially the eastern markets
in particular, Guwahati maintained its regularity,” said Sanjay Sengupta,
Regional Manager-East, Gajshield while commenting on the region's dominant role
in the East. Market penetration has also been steady for the vendors with major
e-governance projects lined up. However, in this region, the government as well
as the PSUs resort to direct purchases from vendors or national distributors
instead of routing it through the channel space.

“The SOHO segment accounts for the majority of the consumer segment from the
channel space. Last FY, there has been 100 percent record growth in the laptop
sales with HP having the usual lead followed by Lenovo and LG. Now, on an
average 10,000 PCs are sold every month in Guwahati only,” commented Pawan Kumar
Agarwal, CEO, Datamation Services.

Unlike other upcountry markets in the East which caters to basic consumer and
a self-contained niche segment demands, Guwahati is strong on the accessories
front recording a staggering growth at 124 percent backed by a brawny printer
market with a growth rate at 40 percent on YoY basis. It is predicted that the
market, even under the pressure generated by the present economic slowdown will
continue to grow at a rate of 30 percent YoY.

Avishek Rakshit

avishekr@cybermedia.co.in