Despite the challenging period for distributors, Mumbai-based national distributor Rashi Peripherals has been growing double digit year on year. That is attributed to the growing e-commerce and mobile commerce sectors.
In an exclusive interaction with Channeltimes, Rajesh Goenka, VP-Sales and Marketing, Rashi Peripherals, explains the company’s expansion plans for the year. Excerpts from the interview…
Channeltimes: How has been the company’s performance in FY 2014-15?
Goenka: As per the plan, we just closed our FY in March 2015 with a growth 30% y-o-y basis. It has been a spectacular growth year. We have touched Rs 2900 crore revenue. We have grown across all the 16 brands and product categories. Even we have seen healthy growth in our components business. It has been due to our persistent growth across all the towns and locations. Today, we are equally spread across the regions. Secondly, we do not do commodity business in any brand partnership, we look for value added marketing, which helped us sustain in the market. Today, we are present in 52 locations and 57 centers.
CT: What has been the contribution of distribution and services?
Goenka: Service is not a revenue for us and actually cost to us. Therefore, all the revenue came from distribution, services is just a small part of our distribution, therefore we want to do in that model. Gradually, we want to bring down the cost of services, without compromising on the services that we provide to our customers.
CT: Has the online business impacted your distribution business and partners?
Goenka: Well, in my view the online onslaught, the worst is over. Online is more stabilized, now you do not get products at 40-50% discount any more. Online companies wanted to acquire more customers. Now, these companies are not spoiling the MOP. Second is the demand Vs supply. Today, each company is looking for different channels to grow their product. For Rashi, the 28% of growth has come from traditional channel, and 10% from online channel. Seeing the positive sentiments of the market, we are quite optimistic about PC growth. To tap this, we are opening more branches in towns like North- East, Srinagar, Agartala. We will add 2-3 more cities in this year.
CT: Out of five divisions, what has been the contribution of mobile business?
Goenka: At Rashi, we have five key divisions including components, peripherals , PC divisions, networking and Communications. In mobile, we are distributing Asus and Apple smartphones. Each vertical is focused for us, all the brands we distribute are leaders in their space. We have been able to maintain equilibrium in all the divisions. Having said so, the mobile growth is much faster as we have lower base and average selling price is high higher. For Apple phones, we did 17% growth, we have been the third national distributors, responsible for Maharashtra region.
CT: While selecting brands, what goes behind the partnership
Goenka: We look into first and foremost, how can we do value addition, in terms of marketing, stocking and services. We select brands which are more futuristic. As per our growth, we will continue to maintain our growth from existing and new partnership. Moving forward, we will be growing at the same pace and seeing 20% growth in the current year.
CT: Will you continue to grow in hardware distribution? Is Rashi looking to get into service business like Cloud?
Goenka: Cloud is still in discussion, at the same time, Rashi is having an active level of discussion on this technology. We are looking to have a separate vertical this year.
CT: Being a distributor, how are you spreading your wings and how has been the contribution coming from non-metros? How would you continue to remain profitable?
I can only say in last 10 years, we have been growing CAGR at 29.8%. We have the most consistent growth among distribution houses. Every year we grow by 30%, there has been no single year we have grown less than that. Our management team is very focused, we do not reach to any ad-hoc decision. Our corporate internal mandate is that, Rashi product should reach out to each of the 600 districts of India, we are present in 480 cities, of which 120 districts are still left. For Rashi, the non-metro and metro contribution is 60: 40%.