Adobe rebuffs price disparity in the Indian channel market

Meet the software
resellers in India. Already worried over the market constraints and
software taxation, the partners are reeling under the price disparity
of Adobe products in the Indian channel marketplace, that has only
added to their woes. The lack of software OEM's rationalize approach
is fueling the discontent among the channel partners, who are facing
an acute competition from the e-commerce websites, offering cheaper
Adobe software products, as well as from the overseas market. The
Adobe Creative Suite Premium version is priced at close to Rs 1.10
lakh in the Indian channel market, while the software vendor sells it
for Rs 84,000 via the Web. The sub-distributors and resellers are
finding it hard to sell software OEM's products in the traditional
channel place.

Speaking to The DQ
Week, a Delhi-based sub-distributor on conditions of anonymity
said that, there has been a huge price disparity in Adobe products in
the Indian market as compared to the international stores. "The
customers look at foreign pricing before they make a purchase, and we
have been loosing buyers significantly. This is also impacting the
country, which is loosing commendable amount of moolah in taxes,"
he said. According to another market source, the average difference
is somewhere between 25 to 35 percent in Adobe pricing in the Indian
context. "Even with the import duty, logistics management and
government taxation, the prices should not have been this much in the
country, as this software OEM often justify. The dealers are also
loosing sales as customers are increasingly buying software products
online," the source said.

The DQ Week
contacted Shriram Krishnamachari, Head-Channels and Distribution
for India and SAARC region at Adobe Systems, who said that the
software OEM attracts various taxes and levies like sales tax, VAT
and Octroi etc, which are not under their control. "Adobe sets
the pricing of its products based on extensive market research and
in-depth pricing studies conducted routinely throughout the products'
life-cycle," he said. Adobe products are all priced differently,
and can be bought in different permutations and combinations. "We
have various volume licensing programs for different industry
segments. A customer can upgrade at a reduced price. So one can
upgrade from a point product to a suite or the existing version of a
suite to a new version of that suite. All these will have a different
pricing," added Krishnamachari.

In India, Adobe follows a
two-tier model and has two national distributors, Redington and
Ingram Micro and operates through more than 100 authorized partners.
Softcell Technologies and Futuresoft Solutions are among the software
OEM's key partners, who did not respond to the query posted by The
DQ Week.