Embrace change, DCG members told
First DCG-Disty Symposium focuses on changing reseller mindsets
Members of the Dubai Computer Group (DCG) have been told to embrace and adapt to the changes happening in the local IT sector or face the danger of exiting the market.
The call comes in the wake of continued margin erosion on PC hardware sales and the IT downslide as convergence of IT, consumer electronics and telecom products continues unabated.
Speaking at the 'DCG-Disty Symposium 2014' held at Capital Club, DIFC in Dubai, that saw representatives from nine locally-based distributors attend, Hesham Tantawi, DCG Advisory Panel member and VP at distributor Asbis Middle East, said unless high street resellers operating from Computer Street change their approach to doing business, they will find it extremely challenging to stay afloat.
Tantawi said the rapid growth seen in the mobile sector has adversely affected the traditional PC form factor business resulting in a downslide in the business of high street resellers. "This has been compounded by the strong surge of the power retail sector with most IT multinationals preferring to work with retailers and not traditional dealer channels," he noted.
He said unless resellers were willing to accept the reality happening in the market, this trend will continue and most businesses will be forced to close. "The issue of power retailers getting business from high street resellers is not going to change. There are several reasons why vendors are going with the retail channel and one of them has to do with the fact that it has established credibility in the eyes of the vendors," he said.
Tantawi bemoaned the practise where IT dealers sell to each other something that's not done in the power retail channel. "Retailers have their own challenges like the threat from online shops, but they don't do what high street IT delaers are doing on Computer Street and that is to sell products to each other," he said. "You need to be developing the SMB business as this is currently not being addressed by the retail channels."
Shailendra Rughwani, president, DCG and managing director at Experts Computer LLC Group, concurred and said at the moment, the traditional IT hardware business has been impacted by power retailers as most consumers that used to buy products from high street IT shops are opting to go to shopping malls. "The IT dealer channel is suffering and what we want as an association is to find ways on how we can come up with solutions that help our members to continue evolving their businesses in the wake of increased competition," he said.
Arun Chawla, CEO at regional distributor Trigon LLC, added that it was no secret that the local IT market has witnessed a lifestyle change from consumers in the last five to seven years with most customers preferring to shop their IT products through power retailers.
Chawla said with the changes happening, resellers on the street also need to position themselves in line with what is happening around them and adapt their businesses if they are to continue in the market. "As a distributor we remain committed to resellers as 50% of our business is still coming from this segment of the market," he said.
He pointed out that the local channel stakeholders [vendors, distributors and resellers] have the moral responsibility to do what is right for the market to continue growing and maturing. "The success of vendors comes with distributors being successful at what they do. The success for distributors on the other hand, comes from resellers being able to grow their business and it is imperative that the two segments of the channel work together to advance this market to new heights," he said.
Chawla added that there was need for local distributors to build and develop trust with Computer Street resellers," he said.