Delta plans Kuwait presence

Retail distribution specialist Delta Business Products plans to open an office in Kuwait to flesh out its regional credentials even further.

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By  Stuart Wilson Published  May 20, 2005

Retail distribution specialist Delta Business Products plans to open an office in Kuwait to flesh out its regional credentials even further. Delta has established itself as a powerful player in the Middle East retail distribution market and has built up a vendor portfolio covering its four target retail segments: personal storage, printer supplies, personal entertainment and peripherals. Recent additions to Delta’s product portfolio include cabling and connector vendor Bandridge as well as Trust International, a European manufacturer of high-quality peripherals “We now represent eleven vendors in the retail arena,” said Govinda Siddartha, managing director at Delta. “More than half of these have been with us for less than six months so we are putting in a lot of development effort.” “We used to only have a presence in Jebel Ali and Dubai and shipped product across the Middle East and Africa. Then we set up operations in Saudi Arabia, Oman, Qatar and now we are looking at setting up in Kuwait to complete the GCC coverage,” he added. Each local operation acts as a local stocking point and provides valuable local touch. Delta now has a presence in both Jeddah and Riyadh in Saudi Arabia and eventually intends to develop a presence in Khobar as well. “We think that IT retail in Saudi Arabia has the potential to be much bigger than the UAE,” continued Siddartha. “If you talk to retailers, they tell you of plans to open 20-plus stores across the Kingdom. Even though a lot of Dubai-based distributors sell into Saudi, you now need to have a local presence. You cannot do everything from Jebel Ali.” Delta offers retailers a range of products in each segment that it covers spanning from the entry-level to the high-end. According to Siddartha, the right product portfolio is one of the three key qualities retailers look for in a distributor. “Retailers want the right type of product in each category — low cost options and also A-brands. They also want the best pricing for their customers, which is the most difficult one for any distributor or vendor to manage. We have to try and maintain harmonised pricing on the shelf, but what we can do is create value-added bundles that are unique for big retailers,” explained Siddartha. “The third thing they look for is the reliability of the supplier in terms of stock availability, quick delivery, merchandising and support with promotions. Retailers are not like resellers and they demand a lot more. At the same time they want pricing that is on a par with resellers. The toughest job for us is to convince them that if we are going to provide all these value-added services, there is no way we can give them product at the same price a reseller gets.” To support the distinction between IT channel and IT retail products, Siddartha wants to see more vendors develop specific products aimed at each sector of the market. “If you put a channel product on a retail shelf and the retailer acts like a reseller there is no margin left for anybody. You need to differentiate the product and some vendors like Maxtor are now doing this very well. It has a product for OEM at ‘x’ dollars and a specific boxed retail product at ‘x’ plus some dollars.” Retail distribution is just part of Delta’s total offering. The company also has a channel distribution operation and an IT solutions business working in areas such as networking, e-mail security and ERP implementation. The company is currently developing an ERP package based on a Microsoft platform that it hopes to officially launch at Gitex later this year. Group sales topped US$35m in 2004 and Siddartha reckons that this should rise above US$50m for 2005.

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