Upcountry partners say No to Elcot

PC manufacturer Acer is on the verge of losing its business in Tamil Nadu. Recently, a few upcountry partners from Coimbatore, Madurai, Tirunelveli and Vellore expressed their displeasure at Acer's decision to supply laptops to Elcot at a very discounted rate than that available in the market. Going a step forward, partners in Coimbatore and Vellore even stopped billing Acer products in their regions.

Adding to this the partners in these regions have also opposed the proposed Elcot-channel tie-up that was set to take place in a short time. Just a few weeks back Elcot had expressed its wish to rope in the channel in supplying laptops to students at a cheaper cost in order to bridge the digital divide. The channel also responded positively and there were a round of meetings between C Umashankar, MD, Elcot and representatives of Confed-ITA.

Suddenly few partners in regions like Coimbatore, Madurai, and Tirunelveli, which control a majority of the upcountry market, have shown discontent over the tie-up with Elcot. They have also reacted strongly to Acer's moves in launching a fresh model for Elcot's mass procurement. “We have decided not to go with Elcot and have also stopped billing Acer products. A vendor can't operate two price strategies and rollout two different models for the end-customers and market, as we are also dealing with the end-users. Until we are offered the Elcot price from Acer, we can't afford to sell their products in the market,” informed P Rangarajan, Secretary, Coimbatore Information Technology Association.

“Elcot is primarily a consumer and they in turn can't sell to the channel. And for short-term benefit, the channels should not tie-up with Elcot. Acer doesn't have any distribution tie-up with Elcot, due to which one can't expect any service support from them,” pointed out R Mahesh, CEO, Ozone Computers, Coimbatore.

Almost 50 percent of the partners in Tirunelveli are opposing the tie-up with Elcot. “We are confused as to whether we should opt for the Elcot tie-up or not, as 50 percent of our partners are opposing to the move, as they fear that the tie-up can't bring any long-term benefit for them and will ruin the sales of other products in the market. There is also a stern pressure on us from dealers to ban Acer products from the market,” informed H Naushad Basha, President, Computer Dealer Association Of Tirunelveli (CDAT). He informed that the decision on imposing a ban would be taken only after the EC meeting, which would happen during the weekend.

Followed by Coimbatore and Vellore, Tirupur IT Traders Association is also planning to stop dealing with Acer products shortly. “We would stop selling Acer products shortly. However, we are looking forward to the tie-up with Elcot to take forward the student laptop scheme. We heard that the response for the laptops are very good and we don't want to miss this opportunity provided by Elcot,” informed, K Babu, Secretary, Tirupur IT Traders Association.

When contacted S Karthikeyan, President, Confed-ITA, said that the decision to tie-up with Elcot or not would be taken during the EC meeting that is taking place on July 13. “There is much confusion and opposition over the tie-up. We learnt that Acer is also putting pressure on Elcot to reject the tie-up with channel partners. We can come to a conclusion only after our EC meeting,” Karthikeyan informed.

When contacted, Rajendran, Chief Marketing Officer, Acer India said, "Acer has bid for Elcot order towards ultimate supply of about one lakh notebooks for various Tamil Nadu State government departments, boards and autonomous government bodies at various points in time. The bid does not cover supplies to individuals or non government Tamil Nadu bodies. This is our understanding as per the terms of the contract. Acer is committed to channels as a part of business strategy and will strive not to cause any inconvenience to the partners."

Read full report in The DQ Week, July 14-20 issue.