With Ingram gobbling up Tech Pacific, the distribution business in India has
become bipolar with battle lines drawn between Ingram and Redington. Redington,
it seems, has enough ammo to challenge Ingram. A look at the year gone by
demonstrates the company’s strengths in the distribution business. Overall it
was a good fiscal for Chennai-based Redington India, which showed a 43% growth,
up from 16% last year.
Growth came from different product lines cutting across systems and
peripherals, which constituted 63% of its total revenues. New product lines also
saw good traction-such as Zenith PCs, Acer consumer desktops and portables,
and BenQ notebooks. Products added include the HP Indigo hig-end print products,
Xerox printers and copiers, and Philips monitors.
Last year saw an organizational restructuring. Redington India has now become
the holding company with two entities-Redington Middle East and Singapore-under
it. This change was driven by an investment of $24 mn by Synnex (a $10 bn
company, the third largest global distributor of IT products). Synnex is based
out of Taiwan and has presence in Australia, Hong Kong, and China. Investing in
Redington, Synnex manages to gain foothold into the Middle East and Indian
markets. Moreover, the investments will enable Synnex to leverage its products
like PCs and other IT products manufactured by Asustek Computer, its strategic
partner, through Redington. Meanwhile, using Synnex’s capabilities Redington
will beef up its logistics management.
The dampener however was the mobile business. Redington managed only Rs 84
crore out of the Motorola mobiles, as against Rs 220 crore in FY 2003-04. The
reason, the company says, is because the market is polarized towards Nokia.
Meanwhile on the components side, Redington made Rs 337 crore from Intel CPUs
and Rs 65 crore from Intel motherboards.
The year also saw Redington adding 1,131 dealer outlets and four branch
offices. It also made major investments on improving its infrastructure like
warehouses and service centers. With the economy doing well, with consolidations
within the industry, and with several new distribution opportunities opening up,
the company sees a healthy business growth for the ongoing fiscal.