Thursday, February 9, 2023

Panel Discussion 3: The Role of Distribution Business in the ICT Industry

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This panel discussion took place during the 14th NCN-ICT Summit and Gaming Insight Awards 2022 Event held on Aug 26 at Hotel Crowne Plaza, New Delhi. Distribution plays a pivotal role in reaching products of different brands to the end users and in the success and growth of brands and enhancing their reach. But the offline distribution face challenges from online ecommerce channels due low prices charged by online channels for the same products. This Panel Discussion probed deep into the latest challenges and the dynamics of a successful distribution system and how distributors can improve their bottom-line by adapting to the changes and improving their value addition. The discussion revolved around the challenges and opportunities in the ICT distribution sector and how distributors can take their businesses to the next level.

The panel discussion was held the both physical and virtual formats. During the panel session, the panellists shared their insights about the various technical advancements and market trends in the ICT sector.

Moderator: Mr Sukanto Dey (B.Tech. in IT from IIT Kharagpur and an MBA from IIM Kolkata)

The panelists virtually participated: Mr. Atul Gaur, Director, Savex Technologies Pvt Ltd.

The panelists physically present: Mr. Naved Chaudhary, Head of Marketing and Public Relations, Ingram Micro India Pvt Ltd; Mr. Sanjay Khushlani, Group Product Manager, Supertron Electronics Pvt Ltd; Mr. Pranav Pandey, Group Product Manager, Iris Global Services Pvt Ltd; Mr. Manish Agarwal, Director, Fortune Marketing Pvt Ltd; and Mr. Himanshu Jain, Director, Acro Engineering Pvt Ltd.

Mr. Sukanta Dey launched the discussion briefing on how the latest market trends and new approaches are reshaping the distribution segment. He gave an intro on how interfacing distribution with marketing strategy in the right way is essential for the success of brands and partners.

Moderator: India has a vast distribution landscape in terms of population and space, compared to Europe and the West, and so it has more complex and wider distribution system. For the last 10 years, ecommerce is playing a more impactful as well as disruptive role in distribution.

Mr. Atul Gaur of Savex, “Channel is the fundamental fabric by which the end consumer is made accessible to OEM products and solutions. The distribution channel plays an important role in demonstrating and detailing about the products to the end customers. Distributors also add lot of value in terms of training and reaching services. Today, online channels such as Amazon, Flipkart, Snapdeal, etc, which have emerged a decade ago, have added a new dimension to distribution system. This put a lot of pressure on the offline channel in terms of matching prices, as online products are much cheaper as they do not have to pay margins at different levels as in offline channel. Particularly, during the pandemic the customers got more used order things online from the comfort of their homes.  However, online cannot be ignored and the offline partners need to learn to coexist with the online channels. Of course, offline has its own merits when it comes to giving the user on-hands experience, service, detailing about the products and personal trust. Even some small distributors are also maintaining their own online sales portals. Effective working capital management is an important skill needed in today’s distribution business. Vendors are also realizing the issues between offline vs online and trying to maintain price-parity and other support. Offline channels have to develop the ways to coexist with the online channels. Some offline retailers are assuring no-questions-asked refund to the customers if there is an original defect in the product. And it is really working for them.”

Moderator: Ecommerce works both ways. Some offline distributors in remote locations buy things online and then sell them to the offline customers. So it all depends how an offline partner can intelligently manage things. It’s obvious that not just selling the product and brand, but selling the experience also plays a great role in offline distribution.

Mr. Naved Chaudhary of Ingram Micro, “Ingram Micro has the long and in-depth experience of working with several leading brands and this gives us an edge in the distribution business. This enables us to add value and offer the advantage of economies of scale to the brands. A new entrant into the distribution space should first have a clear vision of what products he wants to distribute, his target market and the geographical segments he wants to focus. He should clearly understand the risks and opportunities, develop proper systems and develop a tentative roadmap before launching into the market.”

Moderator: I request Mr. Manish Agarwal to cast light on how they are doing.

Mr. Manish Agarwal of Fortune Marketing, “Fortune Marketing, incepted 25 years back, started as a small trading company today evolved into big distributor and then we launched our own brands and products. Over time we had the opportunity to learn many things. Launching quality products with best service support and giving right training to our down-the-line partners is our forte. Moving forward, we are looking at an opportunity of getting into manufacturing in India.”

Mr. Pranav Pandey of Iris Global Services, “One major challenge is the fact that the costs of products and distribution have increased post-lockdown, but opportunities are still there as people are willing to purchase more Made in India products. The demand for servers, storage and mobile products has increased in the post-Covid era.”

Mr. Sanjay Khushlani of Supertron Electronics, “Now the market and inventory demands are getting back to the normal pre-Covid levels. Today, nearly 80% of the IT products are catered by offline channel and rest 20% by online. However, it’s also important to note that since India is geographically vast, the online channel can reach the remote areas more effectively than the offline channel. On the other hand, offline channels give feel and touch experiences and personal trust which online channels cannot give.”

Mr. Himanshu Jain of Acro Engineering, “Understanding the market and data analysis are key to success to run a profitable distribution company. Recurring business is extremely important to run a sustainable distribution company.”

In a Nutshell

It is important to be innovative and alert to the changes in the market to be successful in the distribution space. One has to do data analysis and find ways how to balance costs, incomes and profits. Online segment is indispensable and the offline channel should learn to go in parallel with the offline. Offline distributors should adapt to the changes and challenges in the market quickly. To compete with online channels, offline channel should offer value additions like offering better touch and feel and hand-on experience, superior service and warranty and trust which could be lacking in the online segment.


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