The Hindu Business Line : Retail space spells big opportunities

THE last few months have seen Indian PC manufacturer HCL Infosystems attempting to reach out for the largely untapped market that resides at the `bottom of the pyramid'.

While on the one hand, the company is aggressively lining up PC offerings for the sub-Rs 10,000 category — the latest being the AMD-powered, Linux-based HCL Ezeebee Pride computer priced at Rs 9,990 — it is also working on new power management systems that would take personal computers to the power-starved villages of India. In one such path-breaking initiative, HCL has been testing a device that can be charged through pedalling and connects to a Personal Computer (PC) to run it under the most erratic power situations in rural India.

eWorld spoke to Ajai Chowdhry, Chairman, HCL Infosystems, for an update on the project, and also for more on other initiatives being taken by the company, including its IT push into the retail space. Excerpts:

HCL has beenworking on a device that has the potential to run a PC in those areas that do not get any power. When do we see this product hitting the market?

It is nearly ready and can be launched in the next couple of months. The product is almost in the final stage of testing. It uses a pedal to charge a battery unit called RP2, which, in turn, is connected to the PC to run it in those locations that do not have power.

Today, in most places, infrastructure and services are a key problem. We see two distinct markets in rural areas.

The first is via the various e-governance projects. States such as Karnataka, Andhra Pradesh, Gujarat and Tamil Nadu are actively pursuing these projects, and there is a clear requirement for power back-ups that can enable the delivery of services to citizens.

The other part of the market that, we believe, will emerge is the high-end rural customers who will start looking at buying computers, similar to the urban population.

That is where the future market lies. We are looking at addressing the rural markets in both segments. Compared to options such as solar panels and generators, our new product could reduce the cost of the project and ensure there is consistent availability of PCs.

A key factor of success for your pedal PC product will be the number of hours that a person will have to pedal to charge the computer. How do you make the model viable?

The availability of people to do this is not an issue. Typically, it will be two hours of output on over four hours of charging.

What go-to-market strategy would you adopt for this product, given the backdrop of the e-Governance projects that you mentioned?

We intend to give a complete solution. So today we offer a PC and an RP2. In future, we will offer the new product in those places where there is no power. However, the commercial production of the new device is at least three months away at this point of time, after the testing is complete.

HCL has been active in the low-end PC market and has come out with a range of sub-Rs 10,000 PCs.

What would be the next focus area for you?

One of the most exciting areas that we have been working on is the retail market. We started with the organised retail space, for which we created a special product, which is a Point of Sale (PoS) terminal. It utilises all our knowledge of hardware, printing, RFID, and software. The end product is much more than a PC. Retail outlets need an integration of a cash drawer, printer, check-out terminal, credit card authentication, along with the billing software and inventory software. And we are offering them an integrated solution.

Does an integrated solution work out cheaper for the retail chains?

It is not a question of a cheaper solution. The issue here is that of convenience and smooth functioning. We tell our customers the whole solution comes from HCL — the software, hardware and printer; and once we install it, we are responsible for maintaining it. We started this out in the corporate market initially, and we have close to 100 accounts now, in the medium and large-sized market. But all this is mostly the organised market. We are eyeing bigger opportunities in the retail space with VAT and the emerging mall culture.

Retailers have not fully realised that if they do not have a bill at every point of the chain, they will miss out their credits under the VAT regime. Initially when VAT got implemented, in many States, retailers were losing money — but soon realised that PoS was a necessity.

We are beginning to see a lot of interest even from the smaller retailers — small shops, pharmacies, chain of shops amongst others — to look at a PoS product. We feel this market would be very vibrant in the next 2-3 years. We also believe that the mall culture will drive technology adoption. We feel we can create a leadership position in this market place.

Since retail poses such a big opportunity for you, are you also bringing specific solutions targeted at smaller shops and establishments?

Two months ago, we launched a product to address the needs of standalone `Kirana' shops too, for below Rs 20,000 for a full solution. We believe that VAT will drive this initiative in a very big way. Moreover, in this market too, we are starting to see a need for RP2-type product since these shops face a problem of power.

For this market and newer markets that we are approaching, we have opened up an interesting option — that you can run your PC, light and fan on an RP2. This offers an integrated solution for outlets such as shops and post offices.

The Government is taking measures to lower the price for PC and broadband connection for consumers by facilitating affordable and easy finance options. Is HCL involved in these initiatives?

The hardware committee that recommended measures to increase PC and Internet penetration in India had taken the view that if BSNL, MTNL type of organisations come together with hardware companies and banks, then we can grab the PC, broadband opportunity.

Consider this — The PC price has been cracked but the PC EMI has not been cracked, yet. PC, along with broadband connection at easy EMIs, makes a potent combination for India.

The Ministry of Communications and IT is spearheading an initiative where they have brought the industry to the table — SBI, ICICI, BSNL, MTNL and HCL to facilitate financing options.

BSNL had already decided to have a co-branded product with us, now that product will ride on this new strategy. It is still work in progress.

Picture by Ramesh Sharma

moumita@thehindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
No shelter under this cover

Ride the disruptive wave

Portals, fanciest real estate on Web

Call of the online community

No tripping, with IT

The game's on

Trouble after installing service pack 2

Retail space spells big opportunities

Zoom in on the trouble spot

Quiz

Maintaining a network is like raising children

Cartoon

It's your call

On shelves here