Channel Chief
“Focus On Consumers As Commercial Business Will Take Time To Pick Up”
Rashi Peripherals has recently partnered with Microsoft and Fujitsu. Managing Director, Suresh Pansari talks about the new partnerships and shares his outlook for the overall IT market as well as for his company in a tête-à-tête with Dhaval Valia
How significant is the partnership with Microsoft?
It is a significant partnership as it marks our entry into software distribution. It gives us an opportunity to offer a diversified portfolio to our channels and also gives us access to newer channels. We have created a separate division internally to drive our software business.
We will primarily be responsible for Open Licenses, Open Value Licenses and Campus and School Agreements for Microsoft. We would like to increase the breadth business for Microsoft by engaging with new set of partners apart from addressing newer geographies. We expect the Microsoft distribution business to add 10-12 percent to our turnover over the next 12 months.
What is the nature of your partnership with Fujitsu?
We will distribute the complete range of Fujitsu PCs. We will also drive their LCD monitors and range of options and accessories. Our aim is to drive the Fujitsu brand aggressively and expect this business to add 9-10 percent growth to our topline.
The last four quarters have been tough for distributors. How has it impacted your business?
In the last 12 months, Rashi has grown by 7 percent. It’s much lower than the 30 percent CAGR we witnessed in the previous years. However, considering the tough economic scenario, we believe it’s a good show.
Also you have to consider the fact that during this period, we stopped distributing HP printers and Lenovo PCs, which in the previous fiscal contributed almost Rs 100 crore to our business.
Main growth has come from the components division which has grown by a healthy 20 percent, while the growth in the peripheral business has been flat. We have seen a major impact on the PC and networking business which has seen a negative growth of 10 percent. However, this was expected as the market has seen a significant decline in the demand for commercial products.
What’s been the impact of the slowdown on your topline?
During the last fiscal, FY2008-09 we recorded revenue of Rs 710 crore, a growth of roughly six percent over the previous fiscal's topline of Rs 670 crore. Our target is to grow by 15 percent to achieve a target of Rs 825 crore in the current fiscal.
Where will the growth for Rashi come from in second half of the current fiscal?
The growth will come from the two new partnerships with Microsoft and Fujitsu. Also, we continue to see healthy demand from consumer segment. In fact, we have been advising channels to increase focus on consumer business as the commercial business will take time to pick up. We don’t expect capital investment in IT for at least couple of quarters. Hence our strategy is to get a bigger revenue pie from the consumer business.
What is your outlook for the IT market?
If you compare the IT market in H1 2008 vs H1 2009, there has been a negative growth of 15 percent. Revival of IT demand to levels seen before the slowdown will take some time. However, it can be safely said that we have seen the bottom, and we can expect the IT market to grow sequentially from here.
What has Rashi done to counter the slowdown?
Our focus has been to increase the overall efficiency of our organization and enhance productivity. In order to achieve this, we have optimized our internal team structures to create more direct working relationships between HQ and branches, and branches and resellers. This has improved decision making and internal communication which in turn has added more efficiency to all critical aspects of business like forecasting, logistics, credit management etc.
Last year you had expressed intentions to expand your services business. What’s the status?
Our service business is mainly aimed at supporting our existing vendors. We do not have third-party service contracts. Currently, we provide after-sales support from 64 locations, of which 10 were added during the past year. This year we plan to add six more locations.
With Rashi taking the onus of post-sales warranty, there has been an improvement of almost 40 percent in the turnaround time (TAT) for all products we support. We have recently started onsite support for Asus LCD monitors. The enhancement in post-sales support has resulted in increase in market share for these products. |