REDINGTON INDIA Wholesale Success

Chennai-based
distribution major, Redington India, completed the fiscal 1999-2000 with a total
revenue of Rs 749 crore, thereby growing at a rate of 72% over the previous
year. With this performance, the company retained its number 11 rank for the
second consecutive year.

Majority of the company’s revenues came through PCs and
peripheral products in the last fiscal. While Rs 228 crore came from sales of
peripheral products, systems contributed Rs 196 crore to the total revenue.
Supplies of CPU motherboards took off in a big way during the last
year for the company, fetching about Rs 221 crore. The western region sent in
the highest contribution of Rs 298 crore, followed by south at Rs 225 crore.
North’s share stood at Rs 179 crore while the eastern region trailed at Rs 45
crore. Meanwhile, Redington considerably strengthened its service and support to
customers. It remained a national distributor of PCs, peripherals, components,
software, consumables and accessories of brands such as Compaq, HP, Epson,
Canon, Samsung, Microsoft, Intel, APC and IBM.

The
company pumped in investments and focused on building its IT infrastructure
during the fiscal. One of the most significant happenings was the ERP
implementation of JBA Systems 21, that enabled Redington to step up its
efficiency and keep costs low. In fact, the IT deployment in the company was a
key factor in its high growth rate. It also worked on a web strategy for
alternative business models for online distribution. A part of this program was
the company’s website, which offered flexible schemes for the channels–for
example, a configurable model price scheme or delivery time flexibility. The
company also tied up with a distribution finance company, TransAmerica, to
enable extending credit for select dealers in the country.

Being a bit too tied up with its IT infrastructure set-up,
the company did not add any new products or product categories to its portfolio.
However, it did tie up with Samsung for distributing the latter’s hard disk
drives in the market. It is also all set to

add more products to its portfolio due to an efficient ERP-driven system.

Redington plans to add more high-volume, high-value products
to its software and component business during 2000-01. Distribution being an
efficiency and working capital game, it plans to utilize its IT infrastructure
to eliminate duplication in its supply chain, and lay greater focus on
value-addition for its customers.

The company kept up the practice of focusing on the twin
levels of brand and product categories in order to maintain a distinct identity
for each stream of its business. The idea was to have one horizontal focus for
the product line and have the top brands in each product category. This strategy
was successful in the peripherals and systems areas, with the company having
major brands in each product line. For example, in printers, the company had HP,
Canon and Epson, while in systems there were HP and Compaq.

Redington also expanded its channel front, from 840 to 2,500 dealer outlets
in the country. New offices with stocking facilities will be opened in Jaipur,
Nagpur and Indore in the coming fiscal. The company has already expanded into
up-country markets and will be focussing on B and C-class cities in the ensuing
fiscal. It plans to continue with its twin focus strategy–on brand and product
category. DQ