Multiple Zones plans expansion
(By Seema Bassi, The Times of India, New Delhi, 9th September, 1999)

Multiple Zones International, the $600 million US- based global direct marketing and selling company for IT products, is planning major expansion for its Indian subsidiary, Multiple Zones India.

The total investment proposal over the next three to six months is to the tune of Rs 9 crore, out of which Rs 50 lakh is already in place.

At the same time, it is looking at a restructuring of its 100 per cent subsidiary to focus on the concept of web commerce by becoming essentially an online store. It plans to have 10,000 products across 24 product categories on its website. Already, 25 per cent of the parent company's turnover comes from online sales.

Started by Indian-origin Americans, this company brought the concept of direct marketing and selling of IT products through catalogues in India in 1997. After two years it is the largest in the market with Rs 35 crore sales in calendar year 1998. It is expecting to close this year with a Rs 50 crore turnover.

Today Multiple Zone India's buyers include Ericsson, Nokia, Escorts, Bank of America, Hughes. Its vendors include Microsoft, Compaq, Apple and HP. Direct selling for IT products is stil very far from the US market where one out of every four PCs is bought through mail order. Among the company's direct marketing vehicles are its bi-monthly catalogue.

Out of the total planned investment of Rs 9 crore-Rs 3 crore will be pumped in in the next one month and will be utilised as working capital to kick off the expansion process. For this working capital, the promoters of the company, Multiple Zones International and an angel investor are pumping in Rs 1.5 crore each.

"Once these PC-based marketing call centres are fully in place, all our sales will be automated and Web based. Everything--from the dealers to the database on customer choices, their contact numbers, etc, will be available on the network to our tele marketing staff all over the country. A call centre works on a network of intelligent PCs," says Singh. The parent company is operating through marketing call centres in the US market.

For the remaining Rs 6 crore investment, it is seeking funding by venture capitalists. "We expect to finalise a venture capitalist in the next three to six months," says Manpreet Singh, managing director of Multiple Zones India, who holds a 20 per cent stake.

A major chunk of this funding-a whopping Rs 3 crore-will be utilized for the expansion of its call centres-which will be very basic in the initial stage.

Multiple Zones International operates through call centres in the US market. But this concept is highly cost and technology-intensive and is not present in the Indian market. The company will be investing Rs 3 crore in call centres.

Says Singh: "We will be building national call centres--putting lease lines across the country, back end, ERP software solutions, CRM packages, for world class automation even on the buying side as well as the selling side."

Another Rs 1 crore will go into opening office nationally from the present three in Mumbai, Delhi and Bangalore, and one in Singapore.

The rest Rs 2 crore out of the Rs 6 crore will be used for developing web infrastructure funding. Giving projections, Singh says: "On conservative estimates, we expect to reach a turnover of Rs 100 crore by 2001."