When it set up a full-fledged subsidiary in Bangalore in April 1999, its joint venture with Wipro had already been four years old. When the subsidiary was set up, it had announced that being in high growth markets was a long-term strategy. Perhaps it’s Wipro’s culture rubbing off on it, but Acer wouldn’t have been seeing long-term success without rewarding commitment from its partners.
What’s long-term about the Acer Mall, the first of which was launched in December 2003 and four of which were launched in Delhi last week?
The exclusivity label is available only for good, committed channel partners. Commitment is key even from the partner’s perspective because of the amount of investment that goes into the Mall: the real estate to branding and merchandising of the outlets to what Acer evalutaes to be the potential of that outlet to generate sales. S Rajendran, who is driving the initiative at Acer, says that the company zeroes in on partners who have been doing business with it for a period of time before giving them the option of going retail.
The new Malls in Delhi were opened at Nehru Place, Lakshmi Nagar, Lajpat Nagar and Faridabad Two of these are industrial or commercial hubs, and the other two a mix of commercial and residential locations. Why not wealthier localities that are yet to see a mall but do have enough scope? Rajendran’s response: Localities like West Delhi, and tier 2 cities like Indore, Bhopal, Nagpur, Shimla and cities in Rajasthan are certainly on the radar…”However, we will do this only when we are fully convinced about its viability and with the credentials of the partners and their commitment to our buisness. As a company we do not like to clutter the market and want to give our channel enough lung space to breathe and grow which will ensure that their commitment too for our business remains at the highest levels.”
The commitment is also visible in Acer giving first preference to existing retailers to move into areas that it targets. So one Acer Point, its multi-brand store, turns into a chain. Rajendran cites the examples of Focuz Computers in Kerala, which started with one in Thiruvananthapuram and now has 10 across the state; and Bangalore’s Sogo Computers, which has nine across the city.
And how does the partner benefit? “The key for the partner is to reposition himself as an outlet which sells anything and everything connected to this sphere. This outlet should service all consumer needs, from a single window, from the IT, communications and entertainment perspective,” states Rajendran. Also, the need to identify and partner new vendors is eliminated, with Acer doing the job for the partner. It’s currently in the process of tying up with vendors to give its retail channel access to a range of products. These, it expects, would further increase footfalls into the outlets, customers would spend more time within the outlets checking out products, give the partner opportunity to cross sell and make the business more profitable.