THE COMPUTER
CONSUMABLE AND PERIPHERALS MARKET IN CHENNAI
T S Mani, the Managing Director of MBO Computers (I)
Pvt Ltd, the authorised distributors of Imation Singapore,
speaks about the computer consumables and peripherals market in
Chennai today.
How big is the market for this segment? And
what is MBO's share?
The
overall potential in the country is around Rs 300 crores. In this,
the South alone accounts for Rs 75 crore. MBO's share will be 10
to 12% of the total market. Out of the total market, 30% is floppy
requirements another 30% comes from CD-ROM's and the rest
40 comes from digital linear tapes and digital audio tapes.
With the Internet coming in, there is a lot of information being
downloaded and consequently the requirement for storage space has
gone up.
What determines price in this market, apart
from the Ruppee-Dollar rates?
The
customs duty is still very high. Its pegged at 39%. Fortunately
in this Union Budget, the Government has brought both floppy disks
and high-tech cartridges under one category. The grey market is
still taking away a major share of the market. I would say, 30 to
35% of the total market has been taken away by the grey market every
year. Our products are all officially cleared and billed with warranty,
so we cannot offer a lower quote. Typically, we sell our floppies
to the corporates at Rs 118/- plus taxes, with a margin of 5%. You
can get the same product from Richie Street for Rs 105/-, and a
retailer (stationery shop) probably sells it for Rs 150. So there
is a big price difference between the organised and the grey market.
This is a typical high volume, low margin business.
Where does the demand come from and what is
it dependent on?
The
demand comes primarily from the IT and Telecom sectors and then
from Banks, Insurance Companies, Educational Institutions, the Media
and Space Centres. The rough break-up could be 50% from IT and Telecom,
20% from the Banking and Insurance sector, the rest come from Educational
Institutions, Apace Centres and the Media.
Demand is basically dependent on the fact that, people are aware
of the need for backups. Particularly in segments which are dependent
on high volume database.
What are the current growth rates and what
seems to be the prospect?
The demand is certainly poised to go up, with the Government going
in for active computerisation of its departments, with the telecom
sector expanding etc. The rate of growth can be placed at anywhere
between 25 to 30% every year for the next 5 years.
5:02:35 PM 
The
overall potential in the country is around Rs 300 crores. In this,
the South alone accounts for Rs 75 crore. MBO's share will be 10
to 12% of the total market. Out of the total market, 30% is floppy
requirements another 30% comes from CD-ROM's and the rest
40 comes from digital linear tapes and digital audio tapes.
With the Internet coming in, there is a lot of information being
downloaded and consequently the requirement for storage space has
gone up.
The
customs duty is still very high. Its pegged at 39%. Fortunately
in this Union Budget, the Government has brought both floppy disks
and high-tech cartridges under one category. The grey market is
still taking away a major share of the market. I would say, 30 to
35% of the total market has been taken away by the grey market every
year. Our products are all officially cleared and billed with warranty,
so we cannot offer a lower quote. Typically, we sell our floppies
to the corporates at Rs 118/- plus taxes, with a margin of 5%. You
can get the same product from Richie Street for Rs 105/-, and a
retailer (stationery shop) probably sells it for Rs 150. So there
is a big price difference between the organised and the grey market.
This is a typical high volume, low margin business.
The
demand comes primarily from the IT and Telecom sectors and then
from Banks, Insurance Companies, Educational Institutions, the Media
and Space Centres. The rough break-up could be 50% from IT and Telecom,
20% from the Banking and Insurance sector, the rest come from Educational
Institutions, Apace Centres and the Media.
