Distis frown as Kaspersky ups prices

NEW DELHI, INDIA: Observing that its three-user software is being sold by the Indian channels in large quantities outside India, including Middle East, Singapore, Europe etc, and given the fact that there is a wide gap between the India distribution price and the price internationally, which in turn is affecting its business in other countries, Kaspersky Lab, Moscow has instructed its distributor (Zoom Technologies) in India to double the distributor prices of three-user to Rs 752 by June 1.

In addition, the vendor will also be introducing Kaspersky Internet Security Single user in July at a distributor price of Rs 378. The distributor prices will further be tripled in August to Rs 1,080 for three users and Rs 540 for a single user.

Sharing the reasons behind the hike in price, MH Noble, MD, Zoom Technologies stated, “Kaspersky has instructed us to raise the price in view of the fact that the vendor was losing a significant portion of its business in other countries. Apparently, distributors in India are reselling software products to distributors across other countries at lower prices given that there is a wide gap between the India distribution price and the price that the vendor has internationally.”

Noble further added that with 24x7 toll-free technical support from Hyderabad as well as advertising planned by Kaspersky, and with direct marketing presence in India, revenues for all the partners will increase in view of the vendor’s move and will draw some excellent margins for them.

But Kaspersky’s regional distributors had a different take on the vendor’s move to hike prices further. According to the regional distributors, this stance by the vendor will lead to a drop in the sale of Kaspersky products.

Alok Gupta CEO of Delhi-based Softmart Solutions, distributor for the North region stated, “We will follow whatever is instructed to us by the national distributor. However, this move by the company will lead to a drop in the sale of Kaspersky software in terms of quantity in the range of 80 to 90 percent. This hike will also affect our business as the prices for the resellers who we resell to will increase further.”

Gupta further elaborated that in effect the three-user Kaspersky Internet Security that will now be available at a revised price of Rs 752 will be available to resellers at a market price (street price) of Rs 900 and for single user (price Rs 378) will be Rs 450. This is because the resellers will also have to take the taxes (CST and excise duty) into consideration.

Indicating that this is a tricky situation and something that is not common in the industry, Biswajit Saha, Director of Kolkata-based Sea Infonet and Kaspersky’s distributor for the East mentioned, “If it was a policy decision by Kaspersky then the vendor should have hiked the prices gradually and not overnight. We will have to wait and watch to see the acceptance level of the channel partners and the end-customers since this move by the vendor will impact our sales to a large extent.”

Saha further added that sale would go down by at least 70 to 80 percent. However, given that the vendor will shortly introduce a single-user product as well, it will compensate for the sudden steep rise in price of three-user Internet security.

Yet another Mumbai-based regional distributor (appointed for the West) Rahul Zaveri, CEO of Apex Enterprises mentioned, “Kaspersky had entered India market with an aggressive price range and the vendor has now effected a 100 percent price rise for its products. This move will clearly bring down the acceptance level within the channel and our sales will be impacted in a major way. When we raised this issue with Zoom Technologies we were told that Kaspersky had taken the decision knowing fully well that their sales in India would go down.”

In South, K Gunasegharan, Director, E-Caps, the distributor for South region commented, “The move has come as a surprise to us. It will surely create a major dent on our sales figures. About 40 to 50 percent of our sale will be impacted by this decision.” He concluded that it was a wait and watch time to see how the industry would react to the news.

Three User

Zonal distributor: Rs 752

Sub distributor: Rs 840

End user: Rs 1,050

MRP: Rs 1,890

*Prices effective June 1, 2009

Zonal distributor: Rs 378

Sub distributor: Rs 420

End user: Rs 525

MRP: Rs 990

*Prices effective July, 2009