CT: Post the last year rejig, what is the new business focus for 2014?
Naithani: HCL Infosystems has one of the largest sales and distribution network in the country and provides value added distribution to our partners including last mile connect and support in marketing and promotions for telecom, IT, Consumer Electronics and Home Appliances products. The verticals will further add value and strengthen the distribution business. HCLI recently ventured into consumer durables and home appliances space. The company has also invested in establishing a large team to develop product wise complete demand planning. Our exhaustive distribution business touches rural and urban markets alike, making us the preferred national distributor for many leading brands.
We strive for a 24 hour delivery TAT across India. We have a specialized team of demand planners working on making the products available on the right time at the right place, with complete focus in creating a benchmark on forecasting accuracy, through business intelligence and forecasting tools. Hence, the focus of the distribution unit would be:
• deliver a larger portfolio of offerings
• expand into rural micro markets & untapped regions
• continue to offer quality support services
CT: With the three key distribution vertical, what has been the split of the existing channel partners?
Naithani: HCLI has adopted a hybrid distribution model, which allows us to adopt different channel approaches based on the brand requirements and market/area behavior. Distribution business is one of our focus areas and there is a three-corner strategy that we are following:
• Through our distribution excellence program we are in the process of creating a distribution platform, aiming to have robust multi-partner footprint in every district of India
• We are also increasing the frontline field-force, thereby connecting the ground. Also, we intend to take supply service levels to new heights and hence increasing our warehouse footprint
• And adding direct delivery capability
CT: HCL is known for its robust channel network and sales team? What are the new additions being made to further streamline it?
Naithani: HCL Distribution business has an unparalleled network that covers more than 15000 towns across 664 districts in India and reaches out to more than 80,000 retail outlets, over 800 direct distributors and micro distributors and over 400 channel partners across India. We have a team of more than 800 people across India to ensure the best service levels across organized trade and general trade, our supply operations are supported by an extensive spread of 35 IT-enabled depots, more than 15 organized trade enterprises, and reaches out to more than 2200 OT outlets across India, through dedicated Sales teams. We also operate in the branded retail segment where we have a tie-up with 140 stores.
Our focus on Channel engagement:
• On SMB front, we have 450 partners and we plan to engage more with channels to work towards SMBs.
• We appointed more than 100 new channel partners to further strengthen its distribution footprint in India.
• For consumers we have approx. 1400-1500 partners
CT: What are the new distribution pact of this year?
Naithani: With our key focus on products distribution business, the company has recently invested in establishing a large team to develop product wise complete demand planning. We also have the expertise of dealing directly with the factories, and both inbound and outbound operational excellences. We have tied up with several manufacturers of consumer durables, including Braun, De-Longhi, JBL, Hamilton Beach and Whirlpool. We are also in talks with other manufacturers to distribute durables in rural areas.
CT: What are your specific plans for new business category including consumer durables and home appliances?
Naithani: The consumer durables and home appliances space has been confined to metros but through our reach and network coverage, we aim to take this to the rural and remote areas. We plan to scale up this space to Rs 2,500 crore in two – three years. We are in talks with other manufacturers to distribute durables in rural areas.
Also, we are investing a lot of resources and efforts to create last mile distribution in the remotest part of this country and our exhaustive distribution reaches in rural markets and urban markets, making us the preferred national distributor for many leading brands.
CT: What was the revenue performance in the last year and percentage growth targets for this year?
Naithani: Our Telecom Distribution business witnessed 7% Q-o-Q decline in this quarter after consecutive growth in the previous two quarters due to subdued demand since the festive season ended. Despite this, in October 2013 the business achieved the highest value performance in any single month in the last two years. The Telecom Distribution business also expanded its last-mile footprint and strengthened its rural presence by adding 137 RRDs (Regional Rural Dealers) across the country. While, our Non-Telecom Distribution business signed many important partnerships in this quarter such as Canon (printers), DeLonghi (home appliances), Lenovo (tablet), Huawei (video conferencing) and Datacard (ID card printers). Backed by successful addition of many new Principals in the last one year and successful transition of our traditional Office Automation and Software Products Direct Sales business to a Distribution oriented go-to-market model, the non-Telecom Distribution business has registered a 60% Y-o-Y growth in this quarter.