“In the segment that we are operating in it does not make sense to set up a local manufacturing unit in India, as the duty is zero percent”

AOC, earlier TPV Technologies, is the second largest manufacturer of monitors
in the world. The company, which had a topline of Rs 450 crore last year is
aiming to take that figure to Rs 600 crore this year. Mukesh Gupta, Vice
Director, AOC talks about the future plans of the company in India

Why has AOC kept such low profile in the market despite being in the
country for a few years now?

We launched the brand in India in 2001. Since then in the last four years we
have been busy putting the back-end in place. We are a cautious company and we
actually proceeded step by step instead of directly making a big splash. For the
last four years that we have been India we have concentrated on OEM's. Most of
us (in the company) are basically from OEM background and thus we have a mindset
that is set with the OEM's. We are still learning the nuances of the channel
business as in the beginning we had no idea bout how to brand or work with the
channels. That is why only after we had established the company in the OEM
segment did we think about taking the channel route.

Mukesh Gupta Vice Director, AOC

Who all are your distributors in India and were there any pre-requisites
that you were looking for when you started on the channel route?

The one thing that we were very clear about when we were appointing the
distributors for AOC in India was that the person should focus exclusively on
us. That is why though Ingram is our distributor in US we did not go through
them in India, as we wanted the exclusive focus. We have five distributors in
India catering to the major metro markets. We started with the channel partner
route in October 2005 only and in Hyderabad we have SV Electronics as our
distributor, in Mumbai there is Creative Peripherals, Delhi we have appointed
Park Electronik, in Kolkata there is Advance Management and Sri Durga looks
after Bangalore and Chennai market.

Are you looking at making a foray in the upcountry market?

The problem that we foresee in the non-metro markets is the lack of
infrastructure. As of now the focus on network services is not there and we will
need to look at building up a service system before we think of venturing in the
upcountry market. Having said that when we get around to appointing distributors
for the upcountry market the first chance will be given to the existing distis.
The reason being that some of our present distis like Advance have done well for
us in the upcountry market, they have gotten business for us from Guwahati and
Siliguri so when we want to venture in other markets in northeast Advance will
obviously be our first choice. However, once they refuse then we will look for
new people.

What share of your present sales is through channel and how much is
direct?

For AOC in most areas in the country the end-customer sales are better than the
business that we do through channels. Every month we manage to sell 100-125
thousand units and of that around 10,000-15,000 units are through channels.
However, the channel sales this year are showing a positive rise every month. In
fact in the first half of this year we have managed to sell almost 80,000 units
already. So we are optimistic about it growing even further.

While you have been here for a while, your market presence is not as
visible as your competitors? What is the brand strategy that you are looking at
adopting in the Indian market in the future?

AOC as a rule is not very aggressive in the branding sphere. We are a very
conservative company and we are not aiming to reach the same brand recognition
as Samsung. Also our branding experience has not been very encouraging in India.
When we launched we had a tough time calling dealers for our meet. Now that we
have been here for some time and they have seen our work this time around
dealers were interested in our meet. As far as strategy in the future goes, from
October onwards we plan to get more aggressive on the brand front.

Talking about Samsung, apart from branding they are also very aggressive
on the price front, what is AOC strategy for the same?

Strategically all over the world we have always priced our products five percent
less than Samsung's price. In India the price difference comes to around Rs
500 while in US there must a difference of $2 to 3. While the ultimate aim is to
be at par with Samsung, our market projection at the moment is that we have the
same product at a more economical price. However, the price difference in the
CRT segment is almost negligible now while in the TFT segment we push volumes.

Are you planning to set up a manufacturing unit in India in the near
future?

In the segment that we are operating in it does not make sense to set up a local
manufacturing unit in India, as the duty is zero percent. So it makes no
difference where we manufacture the units since they can be brought into the
country at no extra cost. Also since we do not have any complimentary product
offering in the market like say TV it does not make sense to set up base. It is
the companies that are also selling TV's who are setting up plants in the
country since in the same unit they can manufacture both the monitors and TVs.

SHIVANGI YADAV