The street has made tremendous improvement from the challenges it experienced as a direct result of the global economic meltdown four years ago. The business climate has improved somewhat, although there are still resellers on the street that are struggling to identify new opportunities and broaden their business.
Declining margins on IT hardware in general, over competition, budget cuts and a slump in PC sales has made an improving market to suffer further setbacks.
And because some players on the street depend on the re-export business to survive, the latest tightening of trade sanctions against
While relative calm has been restored following a spate of IT traders fleeing
Both IDC and
IDC reported a global slump of 11.4% of PC units shipped compared to the same period last year.
Industry Pundits say it is no longer a shocker that the PC market is struggling given the rapid adoption of tablets and smartphones.
This, said Menghani, has been compounded by the tightening of trade sanctions on
"While the channel business has been operating efficiently in the first six months, largely driven by the surge in mobile offerings, resellers on the street are still adjusting to this reality unfolding before them," he said.
Menghani explained that as
While declining margins have impacted the channel and not just high street resellers, the tightened trade sanctions on
And while the US government has partially eased sanctions on
The move announced by the
Ashish Panjabi, chief operating officer at
Panjabi pointed out that
Apart from the challenges that the export market is experiencing in the region, the emergence of multi-channels has equally affected businesses on the street.
Dikran Tchablakian, CEO at tecbuy, a
He said the key to maintaining a strong presence in the market is to constantly remain focused on the core business areas from operations to logistics to making sure that stock levels are properly maintained. Tchablakian said it is essential that reseller and retailer businesses adapt to the latest technologies and innovations that make their way into the market. "The market remains competitive and strong. Vendors should now look into maximising their performance to ensure that they meet or give more of their margins to channel partners," he said.
With the expanding routes to market, vendors, distributors and resellers are always looking for ways to maximise their reach to market.
Quality Gulf's Menghani agreed and said the rise of multi-channels has affected high street resellers that didn't factor this development. He said offline and online retailers have taken 70% of the business that in the past was handled by high street IT resellers and traders. This reality has compelled us to strategise and focus on offering bundles and promotions. "We have survived the onslaught from retailers and online stores because we offer a diversified range of products and have developed our export markets beyond the
Menghani pointed out that the rise of multi-channels has brought with it major disruptions in the IT channel as all players are grappling to understand how to correctly position their businesses in the mind of the end-user.
He said the market is evolving and with social media taking centre stage, consumers are more informed about products and services and where these can be sourced from without any hassles. "In the current market scenario, there is a role for each channel player. Selecting where to buy a product is a matter of convenience but resellers and especially high street independent dealers should have the capability to address any concerns a client might have from an experience that started as a result of an online shopping experience," he said.
Menghani said with the emergence of online stores, it has become imperative for high street resellers to not only understand these various options available to customers, but to develop appropriate channels to reach out to end-users.
At networking solution powerhouse Cisco, the company works closely with its channel partners to not only focus on their business processes, but every aspect of their operation in order to help increase their profitability.
Mushtaq said the Cisco Channel Partner Program focuses on building and enhancing the partner's ability to deliver intelligent networks and technology architectures built on integrated products, services and software platforms. "Our value-based philosophy rewards channel partners with increased incentives as they add value to their Cisco business," she said.
Mushtaq said because of the recent challenging economic times, channel partners have become very mindful of the need to balance profitability with revenue growth. "While it has been crucial for channel players to place a watchful eye on their operational and capital expenditures, the channel businesses that have truly made their mark are the ones that have focused on recruiting and investing in the best talent, as well as partnering with the right vendors," Mushtaq said.
She said by working with the right technology vendors and recognising new market opportunities including cloud computing and big data solutions, resellers can expand their portfolio and potentially tap into higher margin offerings. "We believe that training and certification adds significant value to the channel, ensuring that they have the right skill sets to address new market opportunities and not simply to stay afloat in an ever evolving market, but to have a key differentiator," she said.
tecbuy's Tchablakian said with over 15 years in the retail business, the company's winning formula has concentrated on marketing the products in its stable. "The standards that we have introduced, which include the introduction of our store-in-store (SiS) concept, has been cited and recognised by key consumer groups and organisations in the region," he said.
Given the explosive growth of information and the applications to access that information anywhere and anytime, the
"In recent years we have witnessed many governments and enterprises in the region making significant investments in creating and upgrading their respective technology infrastructural networks," said Cisco's Mushtaq. "Today, the network is a vital platform for creating intelligent, sustainable solutions for public safety and security, transportation, buildings, utilities, healthcare and education. This network platform will be crucial for driving growth, innovation, efficiency and productivity in the next 12 to 18 months."
Building a value business
Building value in the PC hardware market has proved a challenge for many high street resellers in
Quality Gulf's Menghani said there is no denying that the market is increasingly becoming challenging for resellers of all sizes because of declining margins and over competition. "As a reseller, we been in the local IT industry for 24 years and during that time, we have seen the market at its peak and low," he said.
Menghani said what has helped
Menghani said a concerted effort is now underway to create these value propositions and it is hoped that
He added that aside from value adding, cash flow management has always been a big challenge as most business in the local channel do business on credit terms.
tecbuy's Tchablakian, added that the company's operations are based on marketing its diverse line of digital and IT products, and replenishing stocks on a weekly basis. "As changes happen on a daily and weekly basis, this allows us to immediately address whatever demand or challenge is at hand," Tchablakian said.
Most Popular Stories
- Adam Levine Wins Big as 'The Voice' Crowns Champ
- Target Security Breach May Affect 40 Million Cardholders
- Archer Daniels Midland Moving HQ to Chicago
- Tyson Foods Charged With Civil Rights Violation
- Texting With Vodka: Booze and Social Media Can Mix After All
- How to Protect Yourself After Target Data Breach
- Mazda Leads the Pack for Fuel Efficiency
- 'Beyonce' Tops the U.S. Album Chart
- Bernanke Lets Congress Have It in Final Press Conference
- Wall Street Falls a Day After Surge