As Asbis prepares for yet another calendar year, the distributor is using the start of yet another new year to cement its position in IT components distribution while at the same time increasing its market share and footprint in mobility, retail and solutions selling.
Asbis, which recently launched the Canyon and Prestigio product lines to over 300 regional distributors in the Asian market wants to diversify its business beyond components distribution, expand its channel and broaden its product portfolio.
Hesham Tantawi, VP, at Asbis Enterprises, META, says coming from a components background, Asbis has over the last two years branched into mobile computing solutions. Tantawi says the company has been growing its notebook products portfolio and todate it has Dell, Lenovo and Toshiba as the notebook & netbook brands it represents. “We were a bit late in getting into mobile solutions,” he says. “This has not dampened our resolve to grow our brands as we are already in talks with other notebook vendors.”
Tantawi says this year unlike last year when sales were down and the survival of resellers was priority, Asbis will be addressing three key areas of its business namely mobility, retail and solutions selling. “We have realised that in order to help our channel partners to be more competitive, Asbis needs to have the product breadth to go with it,” he says.
Tantawi reiterates that the company is in no way going to stop or defocus on components but rather enhance this business by offering holistic end-to-end solutions for our resellers.”
Given the rapid commoditisation of It products, most vendors and distributors in the region are increasingly turning to the IT retail channel as another alternative route to market. This doesn’t mean that the traditional dealer channel will die.
Tantawi says having conducted research of its own, Asbis found out that 45% of IT revenue contribution in the Middle East comes from the retail sector. “This is a massive contribution and goes to show how important the retail sector is to the IT industry in the region,” he says.
He attributes this to the fact that majority of the retail players in the Middle East are more organised and offer a high level of professionalism than the fragmented smaller dealers that serve the SMB space. “The SMB market space is so fragmented and not yet mature in the Middle East. This has led to super retailers in the region to overtake them in selling IT solutions.”
Tantawi says Asbis has decided to focus and work with retailers especially in Egypt and Saudi Arabia because the two countries have so much retail potential. “There is no denying that the retail sector not just in the Middle East has emerged as the most sought after route to market for IT products,” he notes.
Tantawi says another reason why the retail market is having so much appeal for IT products, has to do with the fact that online shopping hasn’t really taken off in the Middle East like it has in more mature markets in Western Europe and North America.
By having a dedicated focus into in the retail channel, Asbis will eventually have access to some of the super retailers in the region who work cater to both SMBs and consumers.
Although netbooks have been popular in the Middle East largely due to the price point, Tantawi believes the next “big thing” in mobile computing will be tablet PCs. “In the past, we had a tablet notebook,” he says. “Tablet PCs that are coming into the market now are much thinner and light in form factor,” he says. “This will be the compelling aspect about these new tablets.”
Aside from the mobility push, Tantawi says the company has continued to expand the products it represent and recently signed on Symantec as it distributor for the North African region. “We are dedicated to sign on vendors in the software space especially security as this is a portfolio we would like to grow,” he says.
Tantawi says while the company has been working relentlessly to grow its business units, Asbis is eyeing the Egyptian IT channel market because there are a lot of initiatives that the government there is pioneering which will create a lot of opportunities for distributors. “We have been following a lot of government IT-driven projects in the education sector that aim at creating the next generation of IT savvy citizens,” he says.
Tantawi adds that the Egyptian government has embarked on an ambitious digital and IT literacy initiative that will see the country develop pools of IT skills and re-export such skills to other countries in the region. “To achieve this, the government has rolled out several initiatives in so far as certifying individuals and companies that offer IT literacy programmes all in an effort to bridge the digital literacy gap.”
Tantawi is enthused by this move as he believes Asbis and many other distributors and resellers in that market will benefit from a literate IT market where almost every household or small business has a PC that is connected to the Internet.
Aside from the Egyptian market focus, Tantawi says the Saudi Arabia market is emerging as one of the fastest growing IT market for SMB and retail activities. This coupled with the initiatives of increasing IT literacy in the Kingdom. “Overall in the Middle East, there is so much business potential and certainly the initiatives being pushed by most governments to embrace IT and have each household connected to the Internet using a PC is a welcome move,” he says. “What needs to follow is professionalism and how resellers do business. It is by developing expertise that the channel market in the Middle East will mature.”
Looking ahead, Tantawi says although business was highly competitive in 2009, he would like to see resellers move away from the box dropping mentality and think about the bigger picture of solutions selling.
Tantawi says he is saddened by a new trend that showed its face last year where majority of resellers started to sell products to each other for a small margin instead of focusing on solutions selling to end-user clients. “I know last year was challenging but this mentality of going after a small margin at the expense of solutions selling is wrong and has to change,” he comments.
He says Asbis is working closely with it partners across the region to help them overcome some of the challenges that they faced last year which may have led to them engaging into this practice,” he says.
Although Asbis’ gross profit grew better than revenue growth in 2009, Tantawi says the company is targeting a 15 to 20% revenue growth this year and is hoping the gross profits will even be better than last year’s figures. “It is all systems go from us this year and our channel partners can expect nothing but the best coming out of Asbis in 2010,” he concludes.
Regional IT distributor Asbis has embarked on an initiative that will help it to grow its channel market share in Egypt and Saudi Arabia. The distributor is using its experience in components distribution to reach out to system builders in the region, reports RWME?s Manda Banda.