Pamphlet row divides dealers on Ritchie Street

N R Sethuraman

Chennai,

February 19th, 2008

IT traders in Ritchie Street are facing a new problem stemming from the usage
of an old practice followed by traders. Advertisement pamphlets and banners
printed by a few dealers in Chennai's IT hub has become a cause of concern for
the rest of the dealers on Ritchie Street. According to the channel, unrealistic
prices quoted on the pamphlets are forcing them to sell without margins as
end-customers are referring to the prices offered by other dealers on the
pamphlets. "This practice is putting pressure on dealers and we have to
sell our products without any margins. If this continues then it is going to
affect the trade to a great level," claimed A Rakesh Jain, CEO, Supreme
Computers, Chennai. Echoing the same view, Vinod Jain, CEO, Computer Planet
said, "The traders should not play with price. Quoting unrealistic prices
sometimes leads to the bitterness among the end-customers. As a result the
trader community will start facing difficulties." He also asserted that
traders should use innovative ways of advertising, instead of following such
practices.

However, Jain of Computer Planet felt that the main reason behind resorting
to such practices was the lack of space available in the market. "We can't
blame all the traders who are advertising on the streets as their shops are not
in the vicinity of customers. Everyone wants business but the practices should
be fair and it should not be a setback to others," he claimed.

On the other hand, Navin Sethia, CEO, Delta Peripherals, claimed that the
pamphlets are not affecting the market in a big way. "There are many other
issues in the market like credit payment and once these problems are solved
other problems will get solved automatically. Those who are following bad
marketing gimmicks are creating a negative impact for themselves and they will
pay for it," Sethia asserted.

When we contacted traders who were using pamphlets as a mode of
advertisement, they stuck to their stand. Akthar Hussain, CEO, Challenger
Computer said, "We are following this model due to the market pressure.
Other competitive players are also using this method and we don't want to just
stand and watch, as we will lose our business. We even tried to stop the
practice, however we couldn't withstand the pressure from competitors and hence
resorted to issuing pamphlets."

If and when everyone in the market agrees to the terms and conditions of all
traders, Hussain said he too would abide by the rule and stop using such
marketing gimmicks.

L Kannan of Mithu Computers had a different point. According to him, these
advertising strategies are not gimmicks. "I am just making customers aware
of the real price in the market by issuing pamphlets, besides sounding my
presence in the market, without which I can't survive. Few players, who have
established themselves in the market may not need this, but since I am new to
the market I have to make my presence felt here," Kannan claimed.

Of the 15 players who are circulating the pamphlets, a few partners are not
even present on Ritchie Street and most of the prices quoted on the pamphlets
differ from the actual price, which is being provided to the end-customers. But
Kannan denied this observation. "I was the one who started this practice
two years back and many started following it since they felt it was the way to
survive and compete with the big guys in the market. There may be some
difference in the prices and that happens due to the configuration customers'
want. Everyone, in the industry is here to do business and not to cheat
customers," he said.

Most traders feel that some sort of regularities should be brought in for
growth in the market. It is also understood that the lack of unity among traders
is leading to such issues. Moreover, partners feel that only IT Traders Welfare
Association (ITTWA), for traders in Ritchie Street can bring in certain rules
and regulations by uniting the IT dealers' community. However, when questioned
no one knew why the association is not active. When The DQ Week contacted Yaspal
S Jain, VP, ITTWA, he refused to comment on the association and its activities.
However, he stated that some action was indeed needed against those who are
spoiling the market using such marketing practices.