Lenovo reviews Middle East distribution model

Lenovo rejects approaches from new distributors as reassessment of existing partnerships seems likely

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By  Andrew Seymour Published  June 3, 2008

PC vendor Lenovo has spurned the advances of two ‘heavyweight' IT distributors that have expressed a desire to work with the company in the Middle East - but strongly hinted at a distribution restructuring following a review of its second-tier model.

New Middle East boss Khaled Kamel has made distribution one of his first priorities since joining Lenovo last month, and while he has refused to rule out the possibility of a future relationship with the unnamed pairing that recently indicated their interest, he admits that an expansion of the company's distribution channel is unpractical for now.

"We have a certain sized cake and whether you slice it over eight or six the size of the pie doesn't change. Unless somebody really brings in value then I don't see us adding a distributor at this time and therefore we have parked any new partnership proposals that we have received," revealed Kamel.

Along with new transactional business head Ahmed Khalil, Kamel has been evaluating the strengths of each authorised Lenovo distributor in the region. He admits the company needs to "fix certain issues", which could also mean reassessing the relationships it currently has in place.

That news will spark angst among Lenovo's distribution community, which is made up of several large players including some that have been around since the IBM days. In the Gulf it works with five UAE-based distributors including Aptec, Distributech, GBM Distribution, Jumbo and Logicom, and has local agreements in Saudi Arabia with Redington and Logicom.

"We have had to look at what sort of value add each distributor brings to the table and analyse that," said Kamel. "How they give us breadth of the channel is one of the areas that we have proactively built into the discussions with them. I am looking for value add from everybody - from my staff and from partners, be it distributors or the channel."

Bikas Biswas, general manager at Lenovo distributor Jumbo IT Distribution, says he intends to meet with the company's management shortly, but expects an eventual reduction of distribution numbers. He believes Lenovo's prospects hinge on introducing more SKUs from the Far East markets into the Middle East to strike a better balance with the European-led portfolio currently available in the region.

"They will have to get the right product with the right distribution model," he said. "If they invest substantially in this market they will succeed."

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