XEROX TO VENTURE INTO TIER II CITIES

Surabhi Agarwal
The Financial ExpressXerox India Ltd, which has been reworking its distribution strategy in the country since the past three years, plans to venture into Tier II cities and increase its channel partners to around 1,500 from the present 1,300 over the next 12 months.

“Traditionally, everyone has targeted Tier I cities, but we have received a lot of interest from new players in the Tier II cities,” said Andrew Horne, MD, Xerox India. The company has also set aside a marketing budget of Rs 20 crore for this financial year to up its visibility in the market.

Out of the three segments it caters-large enterprises, SMBs and government-80-90% of the demand for colour laser printers will come from the large enterprise segment, said Horne. Moreover, the company expects huge demand from the government sector.

“The Indian government sector has a vast appetite for IT related products as it is increasingly becoming digitised and there is a fast paced adoption of IT within the government machinery,” he said.

On the flip side, given the turmoil in the economy and the rising cost pressures, companies are streamlining their IT spends. However, according to Horne, Xerox has not witnessed any slowdown in demand or negative growth in the company. “As per industry estimates, 3% of a company’s cost goes into documentation so it’s important to have more effective and efficient systems to avoid wastage,” said Horne.

However, the credit crunch in the country has surely affected the 30,000-40,000 jobbers (small shops that operate photocopiers and colour printers).

“There are many jobbers who wish to upgrade to a better technology but are facing difficulties in getting loans for purchases,” said Horne.

Apart from the colour and the commercial printing segment, the company is bullish on document outsourcing and communication services-the fastest growing segment for Xerox India. Xerox has already launched around 20 products this year and has plans to launch another 20 by the end of the year.

Though colour contributes only 4% of the market as of now, the company is bullish on the segment. According to IDC, the Indian colour laser printer market is expected to grow at CAGR of 23% in unit terms for the next four years.