Redington India is keenly watched by everyone in the industry, especially after the change in dynamics in the distribution sector following trends like online shopping, exclusive stores and companies’ direct tie-up with the online stories. P. S. Neogi, President, Redington India speaks to Channel Times on the company’s blue print for future.
Excerpts:
CT: In the face of current change in distribution dynamics, what role does a national distributor plays?
Neogi: The distributors, both National & Regional have played a very crucial role over the years in making IT products and technology available across the lengths and breadths of this country. Huge investments are done by distributors in infrastructure, Finance & Human resources form the back-bone of the IT channel business.
Distributors form the bridge between the brand and the channel, allowing vendors to concentrate on brand-building activities, while being confident that their product is being populated and is being made available to all market & geographic segments, at the correct time, in the proper manner and in adequate quantities. Distributors also play a crucial role in the Value-Added-Distribution segment, where they act as the extended arm of the vendor for market development activities and for supporting partners in their training, technical and product-specific requirements when approaching customers.
CT: Do your employees have separate market strategies? It is said that many national distribution company’s employees, when asked about their monthly/quarterly plans for the product they handle, get the plan of the same from vendor executives/managers and send it to the HO.
Neogi: Our colleagues do not have independent market strategies for the products that we sell. Market strategies and Sales plans are driven by vendor and company objectives, but are based on inputs that are received from our colleagues in the field, basis their ground level experience.
CT: How will you justify the increase in the freight recovery charges?
Neogi: The freight charges had been kept unchanged for quite a few years even when all input costs had gone up. Even with the increased rates of door-delivery charges, we are recovering only a part of the actual costs while a large part of the cost would continue to be absorbed by us.
CT: What is the relationship that is maintained between your company and the brands you handle?
Neogi: Each vendor is unique and requires an approach that is suitable for its GTM objectives and strategies. We at Redington try our best to tailor our approach to the vendor’s objectives while keeping in mind the actual ground level realities in each market segment.
CT: Do you have separate marketing funds/budgets allotted for products while hitting in market? If so, what types of activities are done?
Neogi: No.
CT: What is your view on the online market place? Is there a room, a national distributor like Redington can play control the under-cutting of products?
Neogi: Our relation with online market places is very, very limited and strictly governed by directions given by our vendors. We have absolutely no role to play in any of the pricing strategies adopted by the online market places as any supply that we might make to them would only be at prices cleared by vendors.
CT: Already, companies like Motorola, Alcatel one-touch had inked with Flipkart. What if the same trend continues with IT products also?
Neogi: Off-line distribution has inherent strengths for most of the IT product lines being handled by us and at this moment we do not foresee the online market places posing a major challenge. However, markets, systems and buying patterns are constantly evolving and we, as a traditional off-line route-to-market, would keep evolving and adding value to our offering as and when required, to remain the preferred partner for IT vendors and the channel.
CT: What is your plan for this fiscal? What are the products you will be increasing in your portfolio?
Neogi: We believe that we have a well balanced portfolio and may not be required to make too many significant additions to same unless the product would add very specific value to our partners. We have increased our portfolio significantly over the last two years and would aim to consolidate and strengthen our activity in these product lines.
CT: Many vendors do not want to tie-up with a national distributor and directly appoint a regional distributor. How do you see the trend?
Neogi: Lines between a national and a Regional distributor are somewhat blurred. It depends on the vendor’s specific requirement and approach. For that matter, Redington distributes products for some of its vendors in only defined markets and not across the country. So, to that extent, Redington also focuses regionally for these vendors.
CT: Lastly, there were reports that the company is getting acquired. Will this impact the channel business by any means?
Neogi: I have no personal knowledge or information about the company being acquired.