After setting up Powercom’s Indian operations in association with Zeta Technologies, Simon Chang is targeting a 20% marketshare of the sub-10kVA UPS business. He plans to appoint over 200 regional distys and an equal number of authorized service partners. Simon informs DQCI that MNC brands will soon reign supreme over unbranded local UPSs in India.

How are you planning to deal with the local unbranded UPSs that have almost 50% marketshare in the country?
Earlier, in a product category like printers or monitors, there were 20 or more brands. Over time, the market gets matured and only four or five major players remain. A similar thing is happening in the Indian UPS market. According to IDC figures, MNC brands are gaining more marketshare for the past three quarters.

Additionally, MNC vendors are dropping their product prices, thereby putting pressure on local manufacturers. Few of them have already closed down and some are on the verge of closure. There are a few strong local players, who have survived, essentially because of their AMC business. Within a few years, there will be a major shuffling in the UPS business, with branded players taking over.

When local players claim about giving 600 or 500VA UPS, these machines do not support even two machines. And they give backup of only 10 minutes.

Comparatively, a branded UPS like Powercom 600VA, can support two machines with 17" monitors. So there is a significant value addition that MNCs are offering, at a slightly higher price.

To what extent is the price difference between local and MNC rands narrowing down?
Earlier, local brands were selling UPSs for Rs 1,800, while branded machines were available for Rs 4,000. Today, the same MNC UPSs are available for Rs 2,300 with two-year on-site warranty, including battery. The customer is hardly paying 20% more for a branded MNC product, which works much better than an unbranded machine.

What will be your channel structure in the country?
Zeta will be the caretaker for Powercom in the country and it will appoint master dealers or regional distys. We will have almost 200 of these partners, within the next six months.

Metros will have almost five partners, while C- and D-class cities will have one partner each. There are many small cities in the country, where UPSs are a must and we want to spread our reach to these regions.

How do you plan to handle after-sales service?
We have a dual post-sales service model. We will have our own service centers in eight cities where Zeta has its offices. Additionally, we also will have authorized service dealers.

The quality of service in franchisee service centers is always an issue. How do you want to manage this?
Few local UPS manufacturers have approached us to become a part of our service network. They already have the expertise and are well-versed with the product. All they need is training on the circuitry.

Since all product components will be supplied by Zeta, partners don’t have to buy anything locally. That way we will be able to give the best quality of service (QoS) to end-users. The other important facet of maintaining QoS is the turnaround time. This is still being worked out.

Will you have a manufacturing facility in India?
Yes, we plan to open a manufacturing facility here within two years. It depends on the volume of sales in the country. We can take advantage of an Indian manufacturing unit to export our products to other countries.

What are your other initiatives for the Indian market?
We are very focussed on the Indian sub-continent. This is apparent by the launch of our Indian entity, Asia Powercom, which is a joint venture between Powercom and Zeta Technologies.

We plan to import, sell, and service Powercom UPS for the first two years. After our operations in the country are consolidated, we will double our investment in India.

Powercom was present in India for the past 10 years, but its sales were not very impressive. Why?
Most Taiwanese businesses are manufacturing or R&D companies. They are not marketing-oriented organizations. So, a brand’s success depends on the company that takes care of its marketing in any country. Now that Zeta is in the picture, we expect our business to grow rapidly in India.

Incidentally, we have no competitors when it comes to technology. On the marketing side, we rely on our partners to make our business in a country successful.

How many units you expect to sell in the Indian market in 2004?
I can’t give the exact number of units that we expect in 2004. However, we will have 20% marketshare in the country, in the next two years. We are concentrating only on UPS up to 10kVA, for the next six months, which is the entry- and mid-level segment. We expect to capture 20% marketshare in this segment.

VINITA BHATIA

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