Support lines

The Middle East channel for mobile devices can be a daunting arena given the ferocity of competition and increasing commoditisation of the hardware. So do retailers feel afloat in the turbulent seas unaccompanied or are vendors providing enough of a supporting life raft to help partners stay above water? Channel Middle East investigates.

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By  Julian Pletts Published  September 13, 2008

And this push - although it may come at a superficial level from the vendors - is executed on the frontlines by the retailer with the distributor's support.

"As the distributor you are the mouthpiece of the vendor so everything filters through us in terms of education material," said Ans. "We provide promoters and it is up to us to train those promoters to a reasonable level to where they are able to converse with Joe Bloggs."

Of course, much of the value that a distributor provides is through its ability to make sure that retailers have stock on their shelves. If some sources are to be believed though, there are retailers out there which are not making this job easy.

"There is one challenge we always face with our channel - the supply chain," said HTC's Vardhan. "There seems to be a gap between the back-office and the shop floor, which means the in-store replenishment takes some time. If the product is not on the shop floor we'll call up our disties and they'll say, ‘yes, the retailer has the products'. There seems to be no scientific way to replenish the stocks."

The answer to this problem, suggests Vardhan, lies not only in greater communication between retail management and sales staff, but also in more frequent dialogue between the vendor and all of the retailer's staff.

"We are getting the shop floor staff and the showroom managers involved with the meetings that we have with retailers," he revealed. "We have seen some of the big companies correct this problem by having the showroom manager involved in budgeting."

The distribution channel also feels that relations with retailers would benefit from a higher level of trust and communication. It seems some retailers are unwilling to share information because it contains details about the work they do with other distributors that are tied to different product ranges.

"When retailers start playing their cards so close to their chests we don't have visibility on stock issues and problems arise," said Brightpoint's Ans.

"We encourage our retailers to provide stock issues and sell-through each week. We run a quasi-VMI, but we don't get access to their systems and when you have that relationship as a distributor you try your hardest to make sure that you don't drop the ball. Then you will find that the relationship blossoms because you have the trust."

If vendors are to be believed then the retail channel could also do more to develop cross-selling opportunities in the high-end PDA and mobile devices arena as consumers in the Middle East become more sophisticated and demanding in their requirements.

Nokia insists that cross-selling is a major part of its engagement efforts with the channel. As far as it is concerned, retail partners need to maximise their business opportunities. "Nokia works very closely with its partners to develop the cross-selling of our products and services," claimed Nokia's Yassine.

Although retailers must cope with increasingly sizeable volume targets, tackle difficulties in supply chain management and develop the interests of multiple mobile brands, they are also facing serious pressure from brand-centric vendors to develop differentiation and value add that international vendors take for granted in other markets.

Mobile device vendors will continue attempting to secure in-store space for branding and promotion, but they need to ensure that it doesn't distract them from supporting partners with the resources they need to meet the market's demands.

Stunted growth

PDAs and mobile devices might be sophisticated pieces of kit, but does the retail channel have the skills to articulate the benefits of these products to both consumers and corporate users? Some commentators suggest more could be done to market the value of applications-heavy devices, although Jonathan Ans, director of sales MEA and CIS at PDA distributor Brightpoint, feels the level of maturity of the sector is now becoming reflected in the retail approach.

"There is some smarter stuff just starting to happen here that is the bread and butter in the other markets; the linking, the cross-selling, and the links to the service providers as well," he reflected. "But it is still a case of the retailer saying, ‘I have a product and I want to sell it' rather than ‘I have a group of products, how can I sell a solution?'"

The fact that HTC says one value add of the mobile devices retail channel is merely product availability - surely a pre-requisite in any market - indicates that the sector might not be as fully developed as some suggest. "Value add in terms of availability and having all of the models on the shelves is very important, as is having a salesman who can talk confidently about the product," insisted Vishnu Vardhan, executive director at HTC.

Samsung, however, is satisfied with the maturity of the mobile devices market, although it cites weaknesses in the add-on section of the business. "The mobile market is very mature and the accessories market needs to catch up," argued Sandeep Saighal, general manager of handheld phones at Samsung Gulf Electronics.

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