Aurangabad: The City Of Gates Desperate To Get Attention

Named after the Mughal Emperor Aurangazeb, Aurangabad is best known as the ‘City of Gates’. The tourism capital of the state of Maharashtra, Aurangabad houses several historical monuments such as the Ajanta & Ellora Caves and Bibi ka Maqbara. Being a prominent city in the Marathwada region, Aurangabad has grown commercially and economically. However, considering the progress of the surrounding markets, Aurangabad is still far behind in the race of the developed cities in India. In order to escalate the industrial and commercial growth, there is a dire need to pull investors and MNCs in Aurangabad.

Economic Growth

Aurangabad is the prominent city in the Marathwada region. It has seen a spurt in economic activities with many industries flourishing and prospering here in last 10 years. The retail and tourism industries have emerged very strong in Aurangabad. Today, almost all the prominent brands and LFRs are present in the city. Similarly, the historic significance of Aurangabad has boosted tourism and the other occupations associated with tourism such as hotel and transport industry.

The education sector has rapidly developed in Aurangabad and the city houses several prestigious educational institutes. Aurangabad has also emerged a hub of Pharmaceutical Education. It has many state government schools and colleges for higher studies.

The growth of IT

Generating around Rs 200 crore annual revenue and operating with around 150 dealers, the Aurangabad IT market is a scattered one with no particular IT hub to name. The Information Technology (IT) industry is taking a shape in Aurangabad, however, the city is far behind in terms of IT growth as compared to cities like Mumbai, Pune, Nashik and Nagpur. The city does not have a dedicated IT part or IT cluster to attract MNCs and start ups. At the same time, many brands do not have their direct presence in Aurangabad and therefore, it is dependent on surrounding markets for the procurement of hardware products.

While the hardware industry is growing at its pace, the software industry has very little presence in Aurangabad. Therefore, when it comes to the development of the IT industry, there are plenty of things that needed to be done to attract investment in the IT field.

The challenge of Ecommerce

The IT hardware business has been witnessing de-growth in Aurangabad since last 2-3 years. The major reasons considered for the de growth are E Commerce, taxation and service issues. IT retailers have voiced their concerns over the growing threat from online business and want government to take steps to control the growth of online sales.  “We saw a significant drop in the consumer business during FY 2015. The demand is less and the margins are also shrinking day by day. Therefore, many dealers are now shifting into the other lines of business such as security and surveillance” says,  Jitendra Sahuji, owner of SunTech.

Aurangabad was once known for the assembled PC business. However, the less demand for assembling PCs and consumer’s growing preference to branded products adversely affected the assembling business. Many resellers are now moving towards security and surveillance business. Although the IT business scenario is not very encouraging in the city at present, the contribution from the SOHO segment keep the dealers going.

The way ahead

Despite of the OLS factor and LFRs, Aurangabad IT partners are optimistic about future growth in the industry. The infrastructure development and government projects are expected to further lead the economic growth of Aurangabad making it the investment friendly destination in the country.

Aurangabad at a Glance

Number of resellers: 150 Approx.

Key Verticals: SOHO, Government, Education, Tourism

Prominent IT Association: Aurangabad Association of Computer Traders

Prominent brands: Dell, HP, Acer, Lenovo, Quick Heal, Kaspersky, D Link, TP Link etc.

Interview 1

Jitendra Sahuji, Owner, Sun Tech Computers

What are the key challenges faced by the IT partners in Aurangabad?

Jitendra Sahuji: E Commerce, taxation and service are the major issues of Aurangabad dealers. We saw a significant drop in the consumer business during FY 2015. The demand is less and the margins are also shrinking day by day. Therefore, many dealers are now shifting into the other lines of business such as security and surveillance.

What efforts are needed to boost IT growth in Aurangabad?

Jitendra Sahuji: First of all, there is an urgent need for dedicated efforts to build IT industry in Aurangabad. The government should focus on developing IT parks, IT clusters and promotion industry oriented education in the region. Secondly, the local dealers should get a fair opportunity to participate in the government tenders. The brands and the national distributors should have their direct presence in Aurangabad so that they will understand our difficulties and issues.