It is not often that you find a Dubai-based company that has made a mark on the global business canvas and yet Global Distribution is one such success story.
Recently, the company achieved a consolidated revenue of $1 billion, since its inception 13 years ago. And far from resting on its laurels, the company aims to reach the next billion within the next three to four years. “While, at the same time, ensuring that we maintain one of the highest returns on investment, considering our industry standards,” says V.M. Chandrasekar, Group Managing Director, Global Distribution. He is confident of touching this seemingly ambitious milestone through various steps that amounts to a clear roadmap.
The first step has been to change its market positioning. Back in 2001, when Chandrasekar founded the company, it was positioned as an IT distribution firm and then later on as a mobility distribution one. However, today, it is being positioned as a technology solutions company. “It is not about just one aspect or the other, today everything is integrated,” Chandrasekar says.
Over the last 13 years, the company was focused on creating the infrastructure to support these escalated growth plans. “We have a compelling story in terms of the markets,” says the Group MD. Indeed, with businesses in India, Latin and Central America, Europe and the Middle East, and its recent foray in to the African markets do give it a better chance to get closer to the next billion. “We are even opening offices in places such as Sudan, which has huge opportunities in terms of topline and bottomline,” he says.
Chandrasekar adds that the African market offers immense opportunities in all focus verticals of the company, which is why it’s a good match. “We do thorough market research and look at markets objectively before we decide to expand there,” he explains.
Realising that the company needs to be structured in order to hit this goal, Chandrasekar streamlined functions into four specific segments. “There has to be a clear middle management layer, which is why we have recently appointed high profile industry executives. We hope to grow separately in these four verticals—territorial expansion, solutions business, managing and acquiring franchises and growing the private label business—which will lead us to the primary objective. While I will drive the private label business, we have appointed experienced individuals to spearhead the other three verticals,” he explains.
And by experienced, Chandrasekar means the top brass of the IT world. Parvez Ahmed, an industry veteran who spearheaded Almasa IT distribution, joined Global as Group Executive Director. His mandate is to overlook territorial expansion and consolidation of existing business and put them into the right framework.
Mario M. Veljovic, former Operations and Services Director at Ingram Micro Aptec, has also joined Global as the Vice President Solutions MENA. “We want to really create the solutions vertical within this company in terms of value. Veljovic has the mandate to do that, taking on from the expertise of his previous stints,” Chandrasekar says.
Laurent Journoud, former VP Sales and Marketing at Asbis, will now be responsible for bringing in new franchises and managing the existing ones at Global. “His mandate also includes how to map the skillset of Global in various regions with what the vendors need. Different markets have different requirements. Global might have specific skillset in specific regions. So the mapping exercise itself at a group level is a mammoth task. He will also acquire new franchises whenever there is an opportunity, both on the IT and mobility side,” says Chandrasekar.
PRIVATE LABEL BUSINESS
The private label business, Global’s Group MD says, could contribute significantly to the $2 billion goal. Although aware that it is a very crowded market, Global plans to launch its own brand of tablets, smartphones and lifestyle products under the brand name ‘Ionic’. Chandrasekar justifies it by saying that the products will have some “striking features” when it is launched in the region.
He further adds, “The private label push is something we are going to do at a group level. This will also help us with our topline and bottomline because we see a lot of growth and profit opportunities in this area.”
“We are also incorporating exciting mobility application tools at a deeper level into our private label when we launch it. Once we see that it works well then we can customise it and offer it to the market at a later stage,” he explains.
The partners will have to wait and watch out for how successful these products will be in the market and what exactly the striking features would be. Chandrasekar says the market can expect a lot more from this side of business in the coming months.
Global has laid out clear expansion strategies. Already present in various markets, it now plans to focus on newer regions such as Africa. As it makes better business sense to have an on-ground presence to ensure smooth operations, the company is physically present in all their markets including Africa and India. Chandrasekar further adds that their job is to identify gaps and establish what value they can bring on to the table to fill those gaps. When it comes to the Middle East region, the company plans to cater to all the GCC countries from its headquarters in Dubai itself. Ahmed says there are no plans as of now to expand to countries such as Saudi Arabia, within the region.
“It’s not that easy for a Dubai company to set up an in-country operation in KSA. This can deplete a lot of bandwidth and resources. Based on our experiences, we know it is better to handle Saudi from Dubai rather than go in to Saudi. Whether it is private label or IT, we will go through the partner approach,” he says. He further reinforces Chandrasekar’s point saying that there needs to be a value-add when entering a country and if that is not going to happen, then simply expanding for status does not work well in the long haul.
Nowadays, everyone wants a piece of the solutions business. And that just about sums the problem as well. Veljovic says Global has a persuasive point in this regard by being the only distributor out of UAE, which has the capabilities to venture out. Moreover, what adds to Global’s strengths is the fact that it is one of the few distributors to have both distribution and systems integration under its umbrella. This is the only combination, says Veljovic, which will bring solutions to where it is actually needed— resellers on the street, the plazas and the centres. “These are the people who need it. But most distributors are not reaching out to them. They are trying to sell solutions to systems integration companies who might already have the expertise and don’t really need it. A vast number of companies are starting up here and they need small-type SMB solutions to grow. These kind of solutions need to be built and you need the channel to help you with that.”
Global’s own systems integration company —Tech Forte Systems — gives it the expertise and experience needed in this field. “With systems integration, we go out in a partner model with many of the local SIs and other partners in the region. We, then, build expertise in two industrial verticals — the telcos and education. We drive our distributor’s distribution portfolio to make sure that it complements our approach on the systems integration side,” explains Veljovic.
He adds that the Global office is equipped to have all technologies that they promote in store and acts as a proof of concept for its partners and customers.
Adding on, he says, “I remotely connect from anywhere whether I’m travelling or not, which is exactly the point. This you can only leverage when you have systems integration in-house. When you do it yourself, you need to mirror what the systems integrator needs to do and then ensure you define your borders very clearly so that you don’t conflict with your partners that you have in many countries.”
In the solutions business, the debate about being a value-added or volume distributor is on-going. But how does the company plan to straddle both these different approaches?
To understand this, one has to first and foremost define value. Veljovic explains, “If I claim to be somebody who has provided presales services to Alpha Data then I am ridiculing myself because they already have those capabilities. But if I tell you that Lucky Star computers is selling server because I explained how to sell and configure a server to them, then I have delivered true value. This is what we want to do — offer true value.”
Chandrasekar adds, “When we decided to offer value, we realised our first customer is a systems integrator. Therefore, we must go through the pains of a systems integrator to understand what our customer wants. This understanding is what is lacking with today’s volume or value distributors in the industry.”
Consciously deciding to grow outside first as the Middle East market was crowded then, the company plans to be more visible in its country of origin, going forward. “A lot of consolidation has happened in this market in the last few years. And today at a billion dollar level, we need to have a visibility from our headquarters. Journoud has the expertise to do this,” explains Chandrasekar.
Journoud, Global’s VP Sales and Marketing, adds, “The market is changing very fast and we want to be a step ahead. You will see more communication in the next few months where we will announce partnerships and other related activities.”
Confident that once the company is more visible in the region, it will help to reach its goal faster, Chandrasekar also says having a robust micro-distribution model in place in India will become an added advantage here as the region lacks this kind of a model today.
All in all, territorial expansion, new IT and mobility vendor franchises, value and solutions business and private label are the ingredients with which Global plans to drive the company to the next billion. Although the goal – grow by a billion in the next three to four years – sounds ambitious, the company seems to have most of the ground work and extensively thought-out strategies in place, so there’s nothing really stopping them to make the impossible possible.