Stoking the growth engine
Tamer Ismail, CEO, BDL Group, talks about the evolving role of IT distribution and how the company is helping channel partners to enter new markets in the Middle East and Africa (MEA) and grow their business to profitability.
Briefly outline BDL Group’s distribution focus for GCC operations and the rest of the Middle East?
BDL started its IT distribution operations in the Gulf in 2006. Our aim then was to grow the business in terms of the product lines we carry and the brands represented. Today, we have brands that include Acer, Asus, HP, Intel, McAfee, Microsoft, MSI, Obi, Samsung, Quantum and Transcend. We continue to be on the lookout for new vendor partners.
What has been the company’s achievements in the past 12 months?
A major milestone for BDL Group was when the company moved its headquarters from KSA to Dubai at the start of 2014. That move went well and has helped us to pay more attention to the rest of the Gulf market. The year in general was great as we were able to sign vendors like Acer for both KSA and UAE markets, and Obi on the mobile side of the business. In addition, we managed to ramp up channel activities around the Quantum product array comprising tablets. We recently unveiled smartphones during the Abu Dhabi Electronics Shopper (ADES).
Mobility has been your strength as a focus. Can you elaborate on the various brands you distribute across the region?
As pointed out earlier, we have Acer, Asus, Samsung, Obi and Quantum as our main brands in the mobile devices sector offering products that include notebooks, tablets and smartphones. BDL has been successful in strengthening its alliances with all its vendor partners and in the mobile space this has been elevated to the next level because of the vendors we represent.
How significant is your mobile devices business to the overall sales contribution?
Indeed notebooks constitute a significant percentage of revenue contribution to BDL Group’s annual revenue as we have brands that include Asus, Acer, HP, Samsung and MSI. In addition, we are leveraging our solid alliances in the region to grow these brands in-country. Our addressable market across the product categories is well-defined and we want to dominate the retail and traditional reseller channel across the emerging markets. There has been some improvement in the PC sector after seven consecutive quarters of declining sales. I think notebooks will remain in the market for as long as there is a commercial or productivity need. What has changed is how people consume information and it’s the usage models that have impacted the desktop PC and notebook segment.
Are tablets under considerable stress from smartphones with large screen phablets?
IDC and Gartner recent reports showed that tablets growth had slowed down in the third quarter of 2014. We have seen consolidation as most private label brands especially with entry level products have either exited the market or have been acquired. There is no doubt that the tablets market is consolidating and that’s better because there will be fewer credible brands.
Apart from mobile products, displays and projectors, where else do you see growth for BDL Group?
We have from inception concentrated on strengthening our product portfolio with quality brands offered at very competitive price points. A crucial element when we bring on a brand is to make sure that there is benefits for all our channel partners in terms of profitability. BDL is always paying attention to growing its market share and developing good partner and vendor alliances. We have upped our focus on providing after-sales service across the region as this is a crucial part of any channel partnership.
What investments has the company made across GCC countries?
One of the biggest investments we have made was the relocation of our head office from KSA to Dubai. What this has done is given us better visibility for the rest of the GCC as Dubai is the logistics hub of the Middle East. In addition, the BDL brand is now gaining good sales in the market. The biggest challenge in the initial stages of our relocation was to have enough supplies available to fulfil current customers’ needs. In addition to launching the private label brand, BDL has been successful in cementing new alliances.
BDL has strengthened its reach in the retail channels. Briefly outline the retail partners you currently work with?
Yes we have and at present, we are working with all the major power retailers across the region including Jacky’s Electronics, Eros, Sharaf DG, Emax, Hyper Panda, E-City, Geant, Eureka, Lulu, Carrefour, Safari, Silicon World Computers, eXtra, Safeermarket and Costless Electronics. We have a right mix of products and the power retail channel is an important route to market for us.
How has your private label brand Quantum been received in the market?
In the first year, Quantum focused most of its efforts on building quality products, setting up a two-tier distribution channel and developing the business across MEA. Now, Quantum is aggressively scouting for distributors across MEA and we have a unique strategy for each region. The brand has been growing from strength to strength and is poised for further growth in MEA this year as we have also introduced the smartphone array.
Apart from BDL, are there distributors appointed for other markets for Quantum?
At the moment, BDL is the main distributor across MEA for Quantum. We are in talks with distributors in East, West and Southern Africa with the possibility of appointing a distributor in each of the regions to help us grow the business.
Do you have plans to enter the wearables market segment?
We do harbour those plans in future but right now our focus is on growing the tablets and smartphones share in the MEA region. We will be guided by our philosophy of ensuring that our partners will benefit in terms of earning decent margins before making such a move. If the business is profitable for our channel eco-system then we might get into this market.
What core vertical markets is BDL helping channel partners to target with the Quantum range of products in the region?
Since we started our business with Quantum, we have targeted the UAE, Kingdom of Saudi Arabia, GCC and Levant. Our aim with Quantum is to increase the consumer penetration in the UAE this year. We believe the biggest growth for this brand will come from the education sector. In Africa, we are developing our channels both retail and traditional reseller base.
Where will majority of your company’s growth come from in the Middle East market in 2015?
The majority of our business growth will come from the contribution the IT range of products and services will make and the mobility business. We want to also ensure that as we grow our share, our bottom line is growing. In all this, partner profitability is critical for us.
What new channel initiatives, programmes or schemes will BDL be rolling out this year for your reseller’s, retail and systems integration partners?
BDL is working on a new attractive channel scheme to offer our business partners, which will be released in September this year. I can’t reveal all the details but this initiative will really benefit our partners and we are really looking forward to it.