Micro Max Takes A Dip For Future Growth

CRN Network, December 12, 2011, 1515 hrs Delhi-based Micro Max Technologies witnessed a dip in its topline by 23 percent with its turnover at `156 crore in FY2010-11 compared to `204 crore during FY2009-10. Sub-distribution contributed 98 percent to the company’s topline while the rest was contributed by corporate reselling. For FY2010-11, notebooks and peripherals contributed 100 percent to the company’s business. “Last fiscal we took the tough decision to end our partnership with Lenovo, D-Link and Dell. We were not comfortable with them as they pressurized us too much for big volume sales which affected our operations and bottomlines,” said Rajesh Agarwal, MD, Micro Max Technologies. While dropping the three brands from the portfolio impacted the company’s revenue by almost 60 percent, it partly made up for the drop by signing up HP, Sony, Acer, LG and TVSE. “The new products added an impressive 40 percent to the revenue. More importantly, they boosted our profitability,” Agarwal said. Micro Max has six branches spread across the NCR region. “With the new brands in the portfolio we put more channel sales people on the field to cover every area in the NCR,” said Agarwal. “We also rolled out a new partner program called Premium Partners to engage more closely with the top 200 of our 500-strong active channel network.” The company worked with its Premium Partners by providing them MDF and resources for retail promotions, local marketing, and conducting shows at schools and in surrounding neighborhoods. As a result, business from these 200 partners grew significantly during the last fiscal. Micro Max supported these partners with a higher credit period of more than a month. “Getting financing in the form of bank loans and distribution credit is increasingly difficult for many resellers. We therefore provided an extended credit period to these partners which boosted their confidence in us,” added Agarwal. As part of its consolidation exercise, the company automated its core functions. “We are on a transformation journey at Micro Max and automation is a critical part of this. Automating core functions gave us better visibility into our inventory, supply chain and finance. It also contributed to our bottomline by saving direct costs and enhancing productivity,” said Agarwal. Micro Max intends to venture into the distribution of solutions-led products and is in process of setting up a dedicated team for the same. The company also intends to expand to newer geographies like Rajasthan, Haryana and western UP in the next couple of years.

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