By Julian Pletts
Lenovo, Konica Minolta Printing Solutions, Fujitsu Siemens; all reputed names in the Middle East IT business. So why then has Jebel-Ali based wholesaler Distributech been toiling away with little recognition outside of the offices of these vendor partners? General manager Mohan Choudry talks the low-key approach and his billion dollar business aspirations.
Lenovo, Konica Minolta Printing Solutions, Fujitsu Siemens; all reputed names in the Middle East IT business. So why then has Jebel-Ali based wholesaler Distributech been toiling away with little recognition outside of the offices of these vendor partners?
General manager Mohan Choudry talks the low-key approach and his billion dollar business aspirations.
Distributech seems to have maintained quite a low profile in the Middle East during the past few years. Why is that?
We are an effective member of the Al Abbas Group and have been in the IT industry for the last 30 years. We were possibly the first one to get PC products into the UAE itself as we were also the European partner for IBM.
We normally prefer to keep a low profile, but have some high-profile partnerships. For instance, we've been doing business here with Lenovo for a couple of years now and they are our biggest partner.
I don't think in future we are going to do any external marketing, that's not how we operate. We concentrate a lot on the channel and have lots of one-on-one partner meetings.
Which resellers are you working with at the moment?
Almost all of them in the entire region. In power retail we cater to Emax, Sharaf DG, Lulu and Jumbo. When it comes to Computer Street, we cater to the Al-Ain Centre and most of the traders and resellers.
We also target the corporate SMB segment and are possibly the strongest. You name it, almost everybody is onboard with us.
So why the low profile then?
We have a high profile with the manufacturers. We are at least 70% of Lenovo's business here and concentrate on meeting their requirements. Manufacturers are the best reference for us.
Whoever's tight with us, talk to them and ask what's been their quarter-on-quarter growth, it is always double digit.
Which geographical areas in the Middle East do you cover?
We cover the entire GCC. In Saudi Arabia and in the Levant, there is not much activity going on at the moment. While the UAE is heading the race, we primarily serve Qatar and Kuwait, the two markets that have been performing well for us.
We have also grown the Oman market for Lenovo and have seen reasonable business in Pakistan.
How can you compete with the larger volume distributors operating in the market?
When you say large, I again repeat that we do 70% of Lenovo's business. When I started this business the distributors involved with Lenovo included Jumbo and Redington. We have beaten them already - we added much more than they can even think about.
How big is Distributech in terms of sales?
It is quite massive right now actually. We have been pulling in year-on-year percentage growth of about 40%. We're a fast moving company and I wouldn't be suprised next year if we see three-figure percentage year-on-year growth.
What challenges or issues are affecting your business?
Credit lines in the market haven't been too healthy. This seems to be the only problem for us. We are trying to work around it.
In which area is the credit issue the most problematic?
Mainly the retail side. There is a lot of marketing space out here, and too much competition going on. The margins have diminished and there is no room for errors. Currently we are using our group financial muscle and credit facilities to help deal with this issue.
Do you have any channel development plans coming up?
We will be seeing someone new involved with us, possibly before the end of the next quarter. We already have offices in Oman and Qatar and we are going to be targeting Qatar and Pakistan for channel expansion. We will have offices in all of these places.
What is your overall impression of the distribution business in the Middle East?
It's getting tough. I'm sure it is time local distribution companies in the channel acted. In this part of the world you have to have local understanding and reach. You need to take very quick decisions, locally.
We're dynamic - a decision which could take a traditional distributor 70 hours could be made in 30 minutes with us.
What does the future hold for the distribution channel in the Middle East?
We have a high vision towards 2013. Over the next three or four years the target is to become a billion dollar company. The products we're already handling have great potential: Lenovo, Fujitsu Siemens and Konica Minolta Printing Solutions, which has been one of our main areas for the last 30 years.
Also, we are looking at additions to our portfolio coming up that should get us towards the numbers we are looking for.