Kobian India: IT components and beyond

In the five years since it set up office in India, Kobian has surged ahead to pole position in motherboards. As it attempts to pull off an upset in the UPS market, the company is already gearing up for the next target segment, says Prashant L Rao

Long before Kobian formally established an Indian subsidiary, the entity that was to become Kobian India was distributing products. The story begins 11 years ago when Sunil Sharma kicked of Kobian’s operations and later in 1998 set up its full-fledged India office. “By then we already had Supertron, Neoteric and Compuage as our distributors,” says Sunil Sharma, managing director, Kobian India. Kobian set up its India office to promote sales and channel schemes. “We wanted to come closer to the channel,” says Sharma. The company started setting up support and service centres around that time. Kobian India is headquartered in Bangalore, with branch offices in nine other cities, all of them having full-fledged support and service centres. Kobian India has over a hundred employees, excluding its factory, which is a separate entity.

Manufacturing locally to add value

According to Sunil sharma, there is a big gap between MNC and national brands. That encouraged Kobian to look at the UPS business

The next step was manufacturing. Kobian started looking at the possibility of having a factory in India. 2001 saw the company set up a factory at Silvassa in the union territory of Dadra & Nagar Haveli. The first batch rolled out in October 2001. The union territory is close to Goa, where other companies have their manufacturing bases. Sharma states that the proximity to Mumbai, the biggest market for its products, reasonable cost of infrastructure and manpower and sops from government were instrumental is persuading Kobian to place its factory there. The area has also become a logistics hub as a result of the presence of so many manufacturing units. The Indian factory is one of Kobian’s two such operations worldwide. Its other factory is in China. However, unlike the Indian operation that’s wholly company-owned, the Chinese operation is subcontracted.

A booming business in IT components

The company sells IT components to assemblers and most of India’s leading PC OEMs. It targets end-customers with lifestyle products. Its success in selling IT components can be gauged in part by the fact that an industry survey places it as the leader in motherboard sales with a 35 percent share of the market.

Kobian has focused on the SOHO market, which stayed fairly buoyant even while enterprise sales reeled during the slowdown. Sales to this segment have grown in the last couple of years. Of late, Kobian sees a drift toward cost-effective solutions. Customers want options and AMD is becoming an option, which wasn’t the case sometime back.

As the market moves from PCs to multimedia and converged products, Kobian is offering bundles to take advantage of this phenomenon. Every motherboard it sells goes with multimedia speakers and multilingual software. The aim is to penetrate small markets where language can be a barrier to IT usage.

Recent initiatives

Recently Kobian forayed into the UPS business. “It is a complementary product,” says Sharma. “There is a big gap between MNC and national brands. That encouraged us to launch this product,” adds Sharma. The company is selling 4,000 to 5,000 units a month within two months of product launch. What makes this even more impressive is the fact that Kobian’s power protection products haven’t touched the Western market. The massive demand for its UPS caught Kobian India by surprise—the company expected to sell only 3,500 to 4,000 units every month. It is busy gearing up to increase capacity at its Silvassa factory.

Kobian India exports motherboards and other components from its factory to all 14 company locations worldwide. It also exports hardware services. This very unique business model involves importing hardware that needs repair, fixing it in India and exporting the repaired hardware, in the process earning forex in hardware services. The company was awarded the Excellence Award for IT Exports by MAIT in May 2003.

The people

When it comes to hiring, Kobian India does not look for MBAs. It sticks to hiring experienced folks for managerial positions. The company has employees from all organisations in IT, such as HP, Epson, Intel, Tech Pacific and Redington to name a few. For engineering and service positions, Kobian takes on trainees irrespective of the institute they are from. Candidates have to clear a routine test followed by an on-the-job test. If they clear the second hurdle there are two rounds of interviews.

Over 80 percent of the company’s employees are in technical and customer support. The remainder are sales and back-office staff. From its first year, when it doubled headcount every quarter, to its present numbers, Kobian has grown rapidly in India.

Customising designs for markets

Kobian Singapore has design teams in Taiwan and Hong Kong. These teams are dedicated to customising products for regions. Customising a product for India helps position the same product in Africa and the Middle East. The company is strong not only in India but also in Sri Lanka, Bangladesh and Pakistan, in the subcontinent.

Kobian’s operations are ERP-driven. The company uses a home-grown software package. The server is hosted in Singapore.

The support ERP system captures information from all of Kobian’s service centres. That information is available to anyone in the company, including its design teams.

The next step

Going forward, Kobian India intends to stabilise its UPS business. “We would like to be leaders in the UPS business,” says Sharma. The company sees notebooks as being the next big opportunity. “In time to come, premium desktop uses will migrate to notebooks. We will be launching notebooks,” says Sharma.

prashant@expresscomputeronline.com

Milestones

Kobian sets up its India office in 1998. It sets up a factory at Silvassa in the Union Territory of Dadra & Nagar Haveli in 2001. Enters the UPS business, Kobian manages to sell four to five thousand units a month within two months of product launch. The company wins the Excellence Award for IT Exports from MAIT in 2003.