Chennai-based distribution major Redington India ended fiscal 2000-2001 with a turnover of Rs 1,345 crore, posting a growth of 80% over the previous year’s Rs 749 crore. Since its inception in 1993, the company has consistently grown, distributing products of MNCs Compaq, HP, IBM, Samsung, Epson, Canon, APC, Microsoft and Intel.
SWOT
Strength: Core strategy, consistent growth
Weakness: Portfolio is very specific to multinational vendors
Opportunity: Plans to establish a channel that will focus exclusively on the growing SME segment. Reported selloff of industry leader Tech Pacific makes this the right time for Redington to capitalize on its high growth
Threat: Ingram-Micro and smaller distributors catching up
PERFORMANCE
HIGHLIGHTS
Revenues grew by 80% to Rs 1,345 crore
The company’s channel force also increased, from 2,561 to 5,100 dealer outlets
The year that passed has been the best the company has had, with the turnover crossing the Rs 1,000-crore mark and propelling the company into the DQ Top 10. The revenue came from three areas—systems, peripherals and supplies. On the systems front, the company clocked Rs 401 crore from Compaq, HP, the IBM range of servers, PCs and portables.
Peripherals garnered Rs 455 crore, with a major chunk coming from Samsung monitors and Epson and HP printers. The sale of supplies rose sharply, with revenues touching Rs 344 crore. Against this, packaged software and services made up Rs 144
crore.
Looking at the region-wise revenue break-up, it was the West that led the race, contributing Rs 507 crore, followed by South India with Rs 429 crore. The North stood at Rs 329 crore, and the East trailed yet again, notching up Rs 78
crore.
The impressive growth was the result of the company putting an IT backbone in place. The implementation of the JBA Systems 21-enterprise package helped in the integration of all processes at Redington, leading to greater operational efficiency. Despite being a late entrant in the distribution circuit, Redington was able to move up the value chain by adopting a core strategy of distributing products which are either high value or high volume. This resulted in the company achieving better yield, ensuring healthy financials year after year.
With the IT backbone in place, the company is positioned to add new products to its distribution portfolio. Significant additions during the year include the Samsung range of hard disk drives, the Computer Associates anti-virus back up and security software (Inoculate IT), and TCS’ EX range of financial accounting packages. The incorporation of TCS’ EX range was the result of the company going proactive on the SME segment. Redington is now working on a new channel model that will cater exclusively to
SMEs.
The company’s channel force also increased from 2,561 to 5,100 dealer outlets, and this number is expected to increase further in the year to come.
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Chennai-based distribution major Redington India ended fiscal 2000-2001 with a turnover of Rs 1,345 crore, posting a growth of 80% over the previous year’s Rs 749 crore. Since its inception in 1993, the company has consistently grown, distributing products of MNCs Compaq, HP, IBM, Samsung, Epson, Canon, APC, Microsoft and Intel.
