Taking pride in the fact that he was one of the pioneers in the retailing arena in his region Jain said, “We began our retail business nearly seven years back and today we stock well-known brands of PCs, digital cameras, fax machines and all-in-ones.”

Ashish Aggarwal, Director of Delhi-based Aanchal Computers too opened his first retail showroom of IT hardware in 1996. He claimed, “Though the IT retail concept started taking shape around 2001, we were actually the initiators of this concept as far as East Delhi is concerned.”

Aggarwal has retail counters in New Delhi as well as in smaller cities. He feels that both these markets have their distinct advantages and disadvantages. “In spite of the fact that the market has grown in smaller cities, there is less competition here than in the metros. If you are well organized, then the region of your business does not make any difference. You can generate good results without many issues,” he said.

Ravikant Gupta, Proprietor of New Delhi-based Comhard Systems, got into the retail business quite unexpectedly. He became a distributor of IT hardware in 2002, but never gave a thought to retail. But destiny had other plans in store for him. With the sealing drive by Municipal Corporation of Delhi (MCD) last year, he started looking at retail as an alternate business opportunity.

“Though we started LG Shoppe in Delhi in May 2006 we never had plans to shift from distribution to retail. Seeing the scope in retailing we plan to continue with this business,” he mentioned. Currently, 30 percent of Comhard's business comes from retail while distribution contributes the rest. Over time, Gupta is planning to reverse this ratio.

The company is now planning to open one more multi-brand showroom in Noida or Nehru Place, as well as a Lenovo Exclusive Store. Gupta is also on his way to start an exclusive corner for Acer in his multi-brand retail outlet.

Peripherals Solutions (PSPL) too had gotten onto the bandwagon. Pawan Walecha, the company's director, shared that PSPL had opened a retail outlet in 2006 and was now planning to open one more in East Delhi. “Spread over an area of 1,200 sq ft, our Noida outlet is a multi-brand retail outlet displaying Lenovo, Toshiba and Acer laptops and desktops, and it showcases peripherals of all the major brands such as Samsung, Epson, HP, Logitech, Microsoft and Creative,” he claimed.

What is interesting to note here is that most of these people believe that the scope of retail business exists not just in the metros, but in smaller cities as well. Partners in these cities are trying to understand the customer's mindset and behavior and then come up with a viable service model.

A growing base of upscale, upwardly mobile consumers have similar needs and desires as that of their metro counterparts. This is why retailers in metros are now seeking to make inroads into tier-two and three cities.

Retail vs distribution
PSPL, which was started in 1994, was earlier into distribution. It was on sensing the evolving market trend that Walecha switched to retail a decade later. Sharing his experience he said, “The concept of retail has drastically shifted to multi-brand retail outlets, because the customer wants to feel and study the difference by seeing all the major options under one roof. Thus, vendors today have also understood the trend and don't mind if their own distributors open multi-brand retail outlets.”

An advantage of the retail business is that the rotation of money is faster and margins are better then in distribution Pawan Walecha, Director, Peripherals Solutions, New Delhi

He added that another plus for doing retail trading was that the rotation of money was faster and margins were better than in distribution. At present, PSPL of Delhi is still more inclined towards distribution vis-a-vis retail and corporate sales. But this is expected to become equally balanced between retail-corporate-distribution.

The reason for not completely switching to retail in spite of its many benefits and attractions is because vendors lend full support to those partners who are generating demand for them in volumes, which is possible only through distribution and not only through retail.

Even big distributors have not been able to resist the allure of retail and we have national players like Rashi Peripherals who have taken aggressive initiatives in this sector for example, the Sony World showrooms that they launched.

Vendors are also lending a helping hand to their retail partners. This is because a retailer interfaces directly with the end-customer and therefore is in the best position to drive sales. He can also influence the buying decisions of corporate customers for digital lifestyle products.

Noted Gupta of Comhard Systems, “Advertisement support from vendors acts as a major attraction when it comes to spreading the word among
end-customers. This is where the vendors can help us best.”

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