Computer Gallery Looks At Small Cities For Expansion


5 Aug 2011
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In FY2010-11, Indore-based Computer Gallery posted a turnover of `85 crore, growing by almost 18 percent over its FY2009-10 topline of `72 crore. Revenue from its sub-distribution business stood at `75 crore compared to `55 crore in the previous fiscal. The rest was contributed by its retail business.

The company owed its growth to its penetration of smaller cities for which it added 20 employees who worked closely with its partners to improve coordination and grow its business. While the small cities of Satna, Sagar and Ratlam added 22 percent to its topline, the total contribution of all small cities was 40 percent, the rest coming from the top cities of MP. “We increased our working capital by 35 percent to penetrate these cities because the credit cycle there is not less than 40 days. In June 2010 we opened a branch office in Gwalior which contributed 12 percent to our revenue,” said Sumeet Arora, Director, Computer Gallery.

The company’s move to penetrate smaller cities was supported by smart marketing—unlike in earlier years, Computer Gallery restricted its promotional activities to around four partners in each city. It also increased its marketing budget to Rs 50 lakh.

Another factor which helped the company grow was Dell’s increase in volumes. “As an exclusive distributor for Dell, we more than doubled our business from 800 Inspirons per month to 2,000, and 200 Vostros per month to 500. We also started doing AMD business as exclusive distributors; this contributed 7 percent to our topline,” Arora added.

Nearly 67 percent of the company’s revenue came from notebooks while desktops contributed 8 percent; the remaining was contributed by peripherals, and networking and security products.

To motivate its employees, Computer Gallery came up with a special scheme: vouchers for a foreign trip with the family. “In order to reduce attrition and curb expenses on recruitment and training we increased the frequency of appraisals from twice a year to four times a year. To encourage employee loyalty we provided them finance for two vehicles and flats without any interest depending on their seniority,” Arora informed. In addition, to make its sales force more skillful, Computer Gallery invited professors from management institutes to provide training on a bi-annual basis.

In FY2011-12 Computer Gallery plans to open offices in Satna, Sagar and Ratlam.

source : crn
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