Profiting in peripherals
With most industry analyst firms reporting that the global PC market will grow rapidly in the second half of 2012, largely driven by Intel’s Ultrabooks push and Microsoft’s Windows 8 launch, demand for PC peripherals and accessories is expected to boom.
With most industry analyst firms reporting that the global PC market will grow rapidly in the second half of 2012, largely driven by Intel’s Ultrabooks push and Microsoft’s Windows 8 launch, demand for PC peripherals and accessories is expected to boom. Clayton Vallabhan reports why resellers should capitalise on the peripherals and accessories opportunity.
As with the entire IT segment, the PC peripherals and accessories industry is one that is dynamic and constantly innovating. What was previously a market that concentrated solely on PCs and laptops, peripherals and accessories is now being developed for tablets too. Apple’s iPad and its competitors gave rise to a slew of innovative and tablet friendly keyboards and mice, along with entire docking stations that could transform the tablet into a workstation if required. There is a whole industry of accessories too that is piggy backing on the tablet and thin form factor, with sleeves, cases, and all sorts of protective paraphernalia that is developed to keep your device safe. Adding to this, Ultrabooks too are garnering interest and getting their own range of customised accessories and peripherals.
With all this change, and so much variety to choose from, where do resellers concentrate their efforts? Which segment of peripherals is it that needs to be focused on in order to maximise profitability? The choices are many, but that in itself allows different resellers to concentrate on niche markets. With the foreseeable growth of the IT segment on the horizon, these are exciting times for the peripheral industry, say pundits.
According to research firm GfK Retail and Technology, the IT peripherals and accessories market in the Middle East has continued to grow at a fast rate.
Dr Rudi Aunkofer, global research director IT at GfK, said the peripherals and accessories market has continued to grow presenting huge opportunities for retailers in the region to add-on peripherals and accessories with every desktop, notebook, tablet or smartphone sold. With people embracing smartphones and tablets, Aunkofer said that there are opportunities to sell peripherals for new computing platforms. “There is an opportunity to sell a keyboard for every two desktops sold in the retail market in the region today. There is no doubt that as consumers move to embrace different computing platforms, they are also looking for add-ons in the form of peripherals and accessories.”
Analysts say that the second half of 2012 will see a boom in the peripherals industry, however, Somkant Mishra, general manager, EZY Infotech said the current political and economic situation in the region will affect the sales numbers for peripherals. He said: “Inventory management with right price point will help address any such boom or increase in the sales graph.”
Kamal Kumar, general manager, Exports at Touchmate, agreed and said that the IT industry has learned to live with challenges, and that demand is based on the requirements. He said: “We are ready to deliver any big demands, so it should not be a problem to cater to the needs of the market.
To be successful though, it is necessary for resellers to differentiate themselves from their rivals, and this does not always mean lowering the prices of products. It all boils down to what options resellers have to offer in this regard.
Iman Mozaffari, sales and product director at Golden Systems ME said that resellers need to offer the right level of after-sales service, and must be trained comprehensively about the product and its features. “To help our resellers to sell better and reach a customer base that is interested in quality and not price, we combine our products with the right level of after-sales service,” said Mozaffari.
Mishra of EZY Infotech agreed and pointed out that although price plays a major role when buying a product, the majority of end users want a product that will be ‘hassle-free’ for a reasonable period after purchase.
At Targus, Riyaz Abdulla, regional sales director in the Middle East and Africa, said that it is necessary to support resellers to present the product categories in an appealing way that caters directly to the various consumer types. Abdulla said Targus is committed to support resellers in putting together an assortment which is right for exactly their target customers.
He explained that having a variety of products and technology descriptions makes a massive difference, as it signals to the customer that the reseller is a specialist who is concerned about the consumer’s requirements.
With margins declining and competition increasing, making profits can be quite difficult, but Kumar said that this is nothing new. He said profits in IT have always been declining and the way to tackle the situation according to him is to keep trying and offering new products to clients. “Innovating with product bundles, providing value for money offers and educating the front line team is one sure way of compliment sales with add-ons,” he said.
Mozaffari said that Golden Systems tackles this by offering strong after-sales support on its products and also offers resellers incentives. He said: “Apart from offering strong after-sales service on our products, we also run promotions where we bundle complimenting products at a very competitive price, which has so far proved to be very effective in increasing sales. We also offer resellers incentives and rewards through our Avardz loyalty programme.”
Another area in the peripherals and accessories market that is seeing a lot of activity is the proliferation of grey imports and fake products. This not only results in losses to vendors and ethical resellers, but also presents a dilution in the quality of the products. The peripherals and accessories market is especially susceptible to counterfeit products, primarily because manufacturing may take place at an OEM factory and other manufacturers will simply duplicate the product, without spending a penny for research and development or design.