Global Infonet, a global company with its India office in Delhi, is the fourth largest distribution company of IT and telecom products worldwide. As a group they crossed revenue of 1 billion dollars internationally. Prashant Prakash, CEO, Global Infonet, shares, “By 2015, we want to be a 2 billion dollar company. In our distribution company, we have several verticals. One vertical caters to purely taking care of IT distribution where we are principal distributor for SAP, Xerox, Ricoh, ASUS, LG and Samsung, and we have also recently signed up with AMD and Kingston. In telecom vertical, we distribute Samsung smartphone; we have opened 45 Samsung cafes pan India and we want to increase them to 100 by 2015. Now vendors are asking us to do value-added distribution rather than simple fulfillment job. Now we are going in that direction. We are doing all the activities such as logistics, credit, warehousing, marketing, etc. We are covering 800 towns and we have a workforce of over 250. Depending on the product, we decide the number of towns in which that particular product should be sold and sales volumes to be met. We are following D2R (direct to retail) model at all the 6000retail outlets. However, we are not getting into System Integrator (SI) business. We are a channel driven company and at present we want to focus on that only.”
Vendor Partners, Channel Education and Profitability
When it comes to identifying the vendor-partners for enterprise business, Prashant Prakash comments, “We provide server storage networking systemfor which we have signed up with Dell and SAP. For security set up, we have signed up with other brands. And we are also looking for more enterprise customers as well as partners.
In today ever changing technology landscape, continuous education to the channel is important. On this front, Prashant Prakash asserts, “We have over 6000 partners pan India. We periodically launch training programmes for our partners. We spend a good amount on offering training from our side. Per year we run at least 15 to 16 programmes. For example, for LG, we are launching a special rathyathraprogramme, as part of which we will go to over 50 towns and in each town we will invite 20 partners, where we will arrange LG executives to offer training.”
In the channel there are always two common issues—profitability and recovery of dues. In this regard, Prashant Prakash states, “We offer decent margins to our partners. We have two kinds of products—one category is mass distribution products and the other is value added products. In mass distribution products, it is a game of numbers and volumes.A partner has to maintain a balance between these twocategories and avoid overstocking to ensure the best results.”
The Changing Landscape of Retail Outlets and Business
About the changing channel dynamicsand partner attitudes, Prashant Prakash opines, “If you look 5 years back, there was no organized retail system. But today, HP, Lenovo, ASUS, HCL, all put together there are more than 6000 exclusive outlets. And then Chroma, eZone, BigBazaar, Reliance, etc have another 1000 exclusive outlets. So there are more than 7000 outlets which cropped up during the last 5 years, just for the abovementioned brands, not talking about several others. Customers today want to have more direct experience of the product before they take a purchase decision—that is what these retail outlets are expected to offer.”
Commenting on the recently growing online trade and wild price difference between online quotations and the traditional channel offers, Prashant Prakash says, “Most online portals will disappear within a few years, barring a few who will survive. Then these price wars and wide price variations will also disappear.”
Looking at Future and Beyond
A CEO has to take lot of decisions such as how to choose a product—on the basis of the product quality or on the basis of brand name. On this,Prashant Prakash concludes, “First we study the brand: do they have long term strategy or short term strategy—in India as well as globally? Do they spend enough on R&D?What are their ethical standards? If we find that their strategy is short term and ethics look insincere, then we will not touch them. We are also decentralizing our operations so that regional managers can take more independentdecisions. We are also focusing more on how to penetrate T2 and T3 upcoming markets where GDP growth has been higher than in the big cities.”
