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DCG urges high street resellers to embrace services

Resellers focused on retail sales have been impacted by the power retail surge, says local IT trade association

DCG urges high street resellers to embrace services
Rughwani says the services segment and re-export market remains intact and is on a growth path.

The Dubai Computer Group (DCG) has warned its members to diversify their business and embrace solutions selling and services if their high street business is to stay relevant in the local market.

The DCG's caution comes at a time when most reseller companies operating from Computer Street that have focused on retail sales have been impacted by power retailers who have emerged strongly over the last few years.

Shailendra Rughwani, president, DCG, said the market dynamics are changing and the end-user now has lots of options hence the need for resellers operating on the street to rethink their strategy and business model. "The buying pattern has now become area and convenience specific with the ease of availability of IT products within power retailers and hypermarkets," he said.

Rughwani said there is a far greater need for resellers on the street to enhance their services and start focusing on different products and solutions which power retailers or hypermarkets cannot match. "What we are saying as DCG is that the mindset of dependence needs to change from box moving to a strong emphasis on services and business solutions, which remain largely untapped especially in the SME sector," he said. "New markets for hardware need to be tapped and should be combined with the solutions that resellers are developing for their target markets."

Rughwani explained that Computer Street in Bur Dubai has been one of the most vibrant business districts that houses resellers trading in all kinds of IT products in the region.

He reiterated that bringing in new and innovative products and taking up the dealership/ distribution of different brands, building and growing with that brand would differentiate many resellers from their rivals.

"The IT market for hardware is changing at a very fast pace and one needs to be in tune with the latest trends," he said.

He added that resellers have an advantage over power retailers and hypermarkets in the way the inventory they have is purchased and owned. "There is a greater need for resellers to manage their stock prudently as over stocking in the past created pressure on margins and resulted in price wars and market disruptions," Rughwani noted.

He explained that through the DCG platform, the association is promoting best practices by conducting regular workshops for members where industry pundits come to share business issues on a range of topics. "A lot of resellers are not focusing on the business process side of things, where they need to be getting new products, focusing on servicing, enhancing their technical knowledge rather than just box moving and trading," he said. "We want to help our members in creating new sales channels through different platforms and offerings including online portals.

Rughwani said although the retail business of resellers has experienced setbacks, the changing scenario and market conditions have only increased the determination of most companies to excel and do their best to gain more business. "The retail market is thriving because of the emergence of power retailers however, the services segment and re-export market remains intact and is on a growth path. That is where we want our members to concentrate," he said.

Ashish Punjabi, COO, Jacky's Group, said in an interview with Channel Middle Eastlast month that the high street will remain a struggle as more traffic moves into shopping malls. "We were once a high street retailer and started moving into malls back in 2002. Since then we've become a mall-based retailer primarily. The only thing I can see that can work for a high street retailers is to ensure they're in a high traffic area such as near a Metro station where there is some natural footfall they can benefit from," Punjabi remarked.

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