“From Dubai, the delivery time is significantly reduced to just five days to India, which gives our channel a better turnaround time”

Foxconn is looking at India as the missing link that will complete its
jigsaw when it comes to establishing its presence in the EMEA market. However
David Shih reiterates that initially the Indian market will be managed by
Foxconn's existing hub in Jebel Ali, Dubai

How important is India as a marketplace for Foxconn and what are your
plans for the region?

India is very powerful and emerging market. The Middle East office of
Foxconn has a good cultural and mental understanding of the Indian market.
Another reason for having the Middle East office drive the growth in the Indian
region is because some major distributors based in Dubai have Indian roots and
know the local market conditions very well.

Our Middle East office at the same time has already launched Foxconn as a
brand in 2005 in the MEA territory and today commands nearly 23 percent of the
total marketshare under just two years of operations. Our current experience of
brand building and communications with channel partners could be successfully
transferred and developed for the Indian market.

But won't the distance between the two countries make it difficult to do
business with the Indian channel?

Foxconn has got its hub in Jebel Ali, Dubai and is ready to serve the Indian
partners with a very convenient schedule and the support of a strong team from
Dubai. We are confident that the distance will not affect our channel business
in India.

David Shih MD-Middle East, Africa and India, Foxconn

What are the advantages of serving the Indian market from Dubai?

The advantages of operations from Dubai are very simple, powerful and
beneficial for channel. If we try to distri­bute goods from China to India it
will take us a delivery time of about 24 or 28 days in total before the shipment
reach customers. By current standards this is a very long go-to-market time.

From Dubai the delivery time is significantly reduced to just five days to
reach Mumbai. So by operating from Dubai we can provide quick turnaround time to
our partners. This reduced shipment time will help distri­butors to speed the
process of supplying goods to their channel networks and increase the total
turnover of our operations in India.

Would it not have been easier to open an office in India in such a
scenario?

As I mentioned, currently we have a dedicated hub for Foxconn in Jebel Ali
that has been setup specifically to serve the Middle East and Africa region.
Here we store goods and make them available for all our customers based on a
deep analysis of the market situation and supply forecast.

Rather than open an office in India and have another team managing the
affairs there, we will simply add India as a territory to our Dubai operations.
This makes it easier for us to also work with top distributors in Dubai, who
already have many offices in India. Management is more streamlined in this
fashion.

How exactly will the Dubai office help the channel? Will it be just a
sales office for India or will it offer some other value additions to the
channel?

From day one our Dubai office's top priority is to not just look at sales
and moving boxes. Foxconn is a manufacturer of computer components since 1975
and we are aware that the success of our operations depends on building total
brand awareness for our customers. We have to

factor for the entire channel chain from the vendor to the distributor to
resellers and finally end-users.

At India we have seen that different international brands and local brands
play a massive role. As a global manufacturer, Foxconn also supports some
existing local brands as well as systems integrator partner.

This year we want to extend the entire bouquet of offerings to our channel,
including lowered delivery time, smooth communi­cation, a better understanding
of market needs, easier RMA and international warranty polices. We want to give
partners more options for doing businesses in India.

What is the business growth you are expecting in India?

In India, in our first year of operation, we expect to grow by 10 to 12
percent. We are confident of achieving this.

What will your distribution network be in the country?

We have not yet announced any distributors for India. The Indian market
requires a different approach since the territory is quite big. So two or three
distributors might not work successfully to cover market.

We are currently considering the top five distributors to buildup a strong
and dedicated channel network in India and Dubai.

What are you doing to ensure that your focus on India does not distract
you from your efforts in the Middle East market?

First of all we have studied the Indian IT market deeply and will select
those respective territories where our partner-distributors can focus well. We
also adjusted our forecast system to ensure proper supply of our products like
motherboards, coolers, VGA cards and chassis to match the market needs.

The distribution channel structure in Middle East and Africa is already well
settled and we expect to meet all our partners during the Gitex exhibition this
year. This event helps us to learn more from distributors about their markets of
operations and make proper adjustment for the long-term strategy of Foxconn
participation.

Our entire Foxconn team of Middle East, Africa and India will communicate and
listen to the suggestions given by the channel. We also expect support from our
headquarters in Taiwan or China based on our previous experience of operations
in India with PC system integrators projects.

VINITA BHATIA

vinitavs@cybermedia.co.in