Canon Mumbai CPPs on their way out

Canon Premier Partners (CPPs) are dropping out of distribution of Canon products due to what they term as unhealthy
channel policies set by the vendor and low profit margins. This unrest has encouraged major partners
like Best International, Gujrals Infotech and Creative to move out. 

With an increasing number of Canon partners moving out, a lot of disturbance has been created in the Mumbai channels.

Manoj Wanvari, Partner of Growmore Computer Services who was among the first Canon empowered partner in Mumbai
and also dropped out later, faced a similar situation like these partners. 

According to him, "There was no price protection of any kind offered by the vendor, policies were never channel-friendly, as
they would keep changing every three to six months and most of all, over dumping of products. This
does not give us any profits in the bargain, therefore we moved out of Canon to other competitive products."

On contacting the latest set of partner who have left, Proprietor of Best International and the most recent to drop out of
distribution Saifee Merchant added, "The reason dealers like us opt for products like Canon over
the other fast moving products is to focus and make profits. Now if the vendor does not really bother to support us on this front, then we cannot
hang around for long and watch our margins go down. On various platforms we have also tried informing the vendor but to no avail as it fell on deaf
ears."

Partners like Creative and Gujrals Infotech also moved out sometime back. "There has been control of MOPs which has not
done any real wonders for the channels and even the partners among themselves get into each other's
territory and dump products eating into others margins. I dealt with Canon for 1.5 years and was making profits in the beginning with decent
backends, but by January it got worse, therefore I dropped out. Now I am dealing with
more of HP products," said Amardeep Singh Gujral of Vashi-based Gujrals Infotech.

When contacted, Canon India senior manager (marketing - printer group products) and also the regional manager of Mumbai
between the May 2002-May 2003 Rajeev Singh clarified, "This is not true as the CPP program was
started two years back and channel partners have stuck around with us for this period. In fact, our marketshare has also increased from five percent
to 30 percent in the past two years according to IDC. Distribution strategies haven't changed as we still concentrate on city
wise distribution with our CPP program. Volumes are not possible in the beginning, as we were
not HP who has been present since the last 10 years. On the other hand, HP's business has reduced from 90 percent to 40 percent after our entry into the
Indian market." 

He disagreed with the partners on margins and MOPs. "Partners are intelligent enough and have sufficient knowledge in
running their business. In case of Gujrals Infotech, he moved on to retailing from reselling, which
was one of the main reasons for him moving out. As a vendor there has always been support from our side, but we cannot do policing, as these initiatives
have to come from their side. We have also been creating platforms for channel partners to voice their concerns and have been conducting a lot of
activities in this region."

Compuage, which is Canon's distributor for the Western region, echoed the same view. Sources at the distributor clarified,
"The partners are responsible to a large extent for such kind of situation. Partners like
Creative were asked to move out as it's a policy at Canon to not distribute competitive products and he was an active partner of Epson. But he still is
doing corporate deals for Canon. Then Gujrals was not performing well for an area like Vashi, which was worth 100 to 150 printers a month. The vendor or
we cannot do policing of MOPs; partners have to take initiatives themselves.

Canon has been conducting developmental programs and creating platforms, but they only utilize such platforms to point out
fingers at other channel partners. We agree channel policies have to get more friendly compared to
other vendors and Canon will certainly take steps towards such initiatives." 

Now for Vashi and Dombivli, C-Wiz Systems will be soon appointed as the Canon Premier Partner. In fact, as part of its new
initiatives, Canon will soon be specially appointing a new set of corporate partners to target the
corporate segment.

Nancy Sudheer

Mumbai - CyberMedia News