Expert Speak

The Great Indian Myth About the Gray Market

Gray Market

The term �gray market� has become a pet word for MAIT, business newspapers and large PC manufacturers, who liberally use it to describe the reseller and assembler market.

p____p However, white box manufacturers, popularly and collectively known as the assembler segment in India, boasts very large volumes today, commanding over 60 percent of the Indian PC marketplace.

p____p Although branded manufacturers–like Compaq, IBM, HCL and Zenith–in fact play second fiddle to these unsung heroes, they attempt to label assemblers as gray market operators.
This I believe is unfair.

p____p Most assemblers source components legally, from distributors, and are customer-focused operators, focused on delivering what the customers want. Unlike the biggies, which ride on brand name, and hence charge commensurately, the assembler segment is one that truly and effectively caters to the needs of the Indian SOHO and home consumer.

p____p In this light, organizations should restrict the term gray market to strictly mean traders of fake products, and perhaps importers that do not pay customs duties. Gray could also mean importers which source products not covered by warranty, brought in through channels not legally vouched for by the manufacturer.

p____p While abrand name can instill a sense of security in the minds of consumers, it is not that assemblers in the neighborhood are unreliable.

p____p However, one-man shops are perhaps what is giving the assembler channel a bad name. Customers need to be made aware of the hobbyist assembler, and the more reliable business operator with a proper shop and support infrastructure. This is the role industry organizations must play.

p____p There are PC integrators in smaller towns and cities which are local brand powers unto themselves, so it is apparent that the industry organizations are playing to the self-centricity of large players.

p____p I strongly believe that it is absolutely false to brand the entire market of PC assemblers as gray market. My recommendation is that Mait must work to induct channel in to its fold and promote its cause with the government. Until then, it will be causing grave injustice to a segment of honest business operators.

p____p Or perhaps, a new organization needs to be developed.

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