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Targeting a Big Jump in the Flash Card Sales
By
Arun Pegu
New Delhi, May 7, 2008
In an exclusive interview with Channel Times, Austin Huang, regional head-sales (SAARC and AP) of Transcend, speaks about the company's products and channel strategy to Arun Pegu. Excerpts
What kinds of schemes and incentives are offered by Transcend to motivate the Indian resellers?
Transcend has extremely strong relationships with its channel partners. The Transcend brand enjoys the highest recall amongst Indian customers. Our products are easy to sell, while they allow better profit margins for Transcend channel partners - as the company continuously offers the best price to its channel partners ensuring their profitability.
Our partners appreciate the fact that selling Transcend products is a win-win proposition for all concerned. The customer gets a reliable and affordable product. The channel partner gets decent profit margins, and as a company, the brand image of Transcend also helps better sales turnover.
Finally, Transcend gains from the enhanced channel participation in the form of boost in sales. Another thing that the channel community appreciates is the fact that - with Transcend's new China factory initiating its operations, the product supply is more stable compared to any of its competitor brands.
Normally, new channel partners start with lower inventory in the trial period, and once they are convinced about the demand and acceptance of Transcend's products, they easily increase their inventory - as it ensures them even better margin. Transcend would not have been so successful in India, if our customers didn't like our products or the channel partners were not making profits.
Who are your major channel partners? Are you planning to add more channel partners in the coming days?
Today, Transcend distribution network covers all the major metros, such as Delhi, Mumbai, Kolkata, Chennai and Bangalore. We have national distributors like - Redington, Mediaman, Superton to cover Class A, Class B and C cities. Also, we do have a few regional distributors like - Intratech, Rahul Industries, Luminous, for their reach into the regional markets. As of now we don't have any plans to expand, unless the distributor has a very unique value to Transcend.
What kind of channel strategy are you adopting to enhance sales of Flash Card and MP3 categories?
Regarding flash card, we have developed 2 variants for different needs of users. On one hand, we remove unnecessary adaptors and cases for those cost driven users and bulk quantity dealers such as mobile bundle.
On the other hand, we maintain complete and fashionable designs for other segments. We are also pushing Transcend flash cards through national retailers, such as - Staples, Reliance Digital, Croma, as well as mobile chain stores such as Hotspot, The Mobile Stores.
As to MP3, we have launched a new series of models from entry to professional MP4 (T.sonic 320, 650, and 850). We are also pushing these products through Retailers and the traditional IT channel partners at the same time. These MP3 players cost almost 50% that of any branded ipod and having similar features and sound quality.
What is your market share in the Mp3, Flash Card and Multimedia products segments? What are your growth expectations?
Flash card will be a key growth driver for Transcend in India this year. Actually, since Q4, 2007, we have started to experience 30% MoM, meaning each month we have 30% shipment over the last month's. Today, we believe Transcend is taking 20% market share, and will be soon stepping into 30%.
For MP3, one single model - T-Sonic 610, brings us more than 10K shipment per month. Our market share is probably less than 15%. However, the new series T-Sonic 320, 650, 850 will bring us to another peak.
For Digital Photo Frame, there is no clear market leader in India yet. Transcend has launched T.photo 710, and will launch another 3 models this year. T.photo 720 will be released in June.
What kind of services support are you providing to the customers? What is your future plan to expand the growth of your products in the market?
Since, for our flash drive (V30 and other series), and memory module (JetRam), the defect rate is extremely low, we were not investing too much in service network. Now that we are diversifying product lines into MP3, portal HDD, Digital Photo Frame, we are planning to build service network in the shortest time. It can be from 3rd party or leverage our existing distys' infrastructure.
Is there any future collaboration you are planning for the growth in the market?
For national retailers, we are just in talk with Reliance Retail, Reliance Mobile and other retailers. We are also talking to certain MNC PC brands for joint promotion activities. We are also seeking cooperation with local Top 3 Indian PC brands to build Transcend module inside.
According to you, which products are selling more in the market and why?
We expect our MP3 players to be one of the best performing products from our comprehensive range. In many countries, Transcend is no.1 in the MP3 segment, leaving even the iPod behind. We are proud of the fact that we understand the Indian customers more than any other MNC players.
With Transcend's MP3 Players, users have an option of spending less than half with same functions, quality and same service level from Transcend. I'd say Transcend MP3 is the best in the market in terms of cost / performance ratio.
Also, Transcend has successfully introduced its Digital Photo Frame in the Indian market. In 2008, we will have at least 4 new models and some of them will have FM radio and even touch-panel. We expect this product to elicit enthusiastic response from the Indian customers.
In addition, this year we are targeting a big jump in the flash card sales. We have the strongest direct support from Samsung/Hynix and other major chipmakers, which will strengthen our position. Transcend worldwide is estimated to ship over 10 millions pieces per month. This has made all chip vendors take Transcend as one of their strategic customers.
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