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Compatibles Industry–Insights and Experience

By: DigiPR, New Delhi

Popular Laserjet printers are available in the market for a mere Rs. 3000-4000. How? If they have spent millions of dollars to develop the technology, why would they throw their products in the market at such prices? Are they doing any social service? Will they ever make profit this way?

As far as print industry is concerned their game appears to be bigger. Their strategy appears to be simple – Let’s make an investment by incurring a loss while selling the printer, ultimately he will need our cartridge and there we will make huge profits.

But now, it’s not all that simple. The huge chunk of profits made by them drew attention of some people and consequently a new industry called “compatibles” was born. Now, the global industry size of this new industry is close to $3 bn. In a price sensitive market like India, Compatibles are gaining importance. With a majority of people having lack of affordability to original spare parts, compatibles appear to be a better alternative. The only challenge the industry faces is educating people about the availability of such alternatives but the word is taking no time to spread.

To some players, compatibles gave them a point to enter the IT peripherals industry, the industry which requires huge setup costs, without any investment. One such player is ProDot which started its business from scratch, and now it is not only the market leader in compatibles, but also the only player to set up a plant to manufacture keyboards, mouse and Laser jet cartridges. Pramod Rajpal, CEO, ProDot group has narrated his story and experience as a successful entrepreneur in the industry-

How did it all start?

We started this business way back in 1987 where we simply used to refill the already installed DMP cartridges in various big companies. Only few companies were following the practice of refilling at that point of time, while most of them bought new cartridges every time. We could sense that IT industry will grow in geometric progression in the coming years and so will compatibles. We stuck around and, consequently, without any significant initial investment, we are the biggest and the fastest growing company in compatibles industry in India.

The success Mantra

After having operated in the Indian market for about 30 years, we conclude that this market is very price sensitive.The only way to grow multifold here is to provide high quality products at lowest possible prices. Understand your customer. People buying compatibles are the people who are seeking cost cuts. Don’t think about making too much premium as they will never be able to pay.

Strongest distribution network

We have a PAN India distribution network with an almost 40% growth in sales every year. This is all because of our distributors, who are the backbone of ProDot. We and our distributors share a wonderful relationship. Without having spent any significant amount on advertising, people recognize as a brand.The credit goes to our distributors who have always created a positive sentiment for us in the market and we have also delivered accordingly.

Managing counter attacks

Big players, having observed the declining profitability due to compatibles industry, lately came up with a new clause that the warranty of their printers will be void if users have used any compatibles. Users are unaware of the fact that the price differences in Original and Compatibles are such that they just have to use the compatible cartridge twice and cost of their printer stands covered.The good thing remains the consumers have started realizing that use of compatibles hardly has any effect on the life of the printers and even if it does, it is still a profitable for them making it a win-win situation for them.

Backward integration

One of the important things we did was backward integration. There is no doubt that China is world’s no. 1 manufacturer. While launching any product, first thing we do is to import the product from China. Most importantly, we do not just stop at getting our product manufactured from China and selling it at in our name, which is an easier thing to do. We follow a backward integration process by learning the manufacturing process, setting up the machinery at our premises, innovate and bring economies of scale to provide better quality at most reasonable prices. That provides us with the “only manufacturer” tag in many of our products like keyboards, mouse, Laser Toner cartridges etc.

Diversification

Traditionally we were a DMP cartridge manufacturing company and we have successfully diversified to Laser toner Cartridges, Keyboards, Mouse, Inkjet Inks, Laser Toner Powder etc. We have also launched our Antivirus in which we have tied up with one of the world’s finest Lab and we are getting a phenomenal response from the customers. It is our constant endeavor is to keep adding something new to the range of products we offer.

Future plans

As of now we have been popular within IT industry. We are planning to bring in a new angle to our products now – connectivity with youth. Soon we will come up with a flashy and trendy product range that will attract the youth. We have conducted a pre-launch analysis of these products and have got a great response. We are excited to launch these products.

Further we are moving ahead to set up a plant which manufactures latest technology USB Flash drives. We are very aggressively identifying new products that can be manufactured in India and will also be making strategic alliances with various manufacturers to speed up the process.

Our mantra will always remain the same – highest quality lowest price.

 

 

Testimonials

Mr. AK Jain, Managing Director, Computer Globe, Kanpur

“ProDot is not just a brand in IT industry but a status symbol to be associated with it. It started from zero and attained a height that set the standards for rest of the companies. Our organization is known in the market as'ProDot shop'. Launch of its made in India Keyboards&Mouse has turned itinto a top brand in the existing line of products. ProDot anti-virus products have also developed a chain of satisfied customers. In our 30 years of experience in IT industry we are yet to find a company which is professional but yet carries strong personal bonds too. “

Mr. Praveen Sethia, Managing Director, S R infotech, Guwahati

We are in IT business since 15 years. Starting from door to door delivery business, we are now into distribution business of all major IT brands and planning to expand to networking business across North Eastern India. We are associated with ProDot since our inception and share a very special relation with them. We have observed that the quality of ProDot products has never been compromised and no other brand offers such wide range of cartridges and printer consumables.

 

11-May-2016 09:34:09
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