The problem of continuous commoditisation is one of the biggest concerns for
distributors in today\u2019s market. This has created a situation of increased price
pressure and shrinking profitability, with even speciality products likely to be
at risk. Not so long ago a TFT was seen a speciality product and now is most
definitely seen as another commodity. Manufacturers from low-cost countries,
such as China and India, entering the market will create further pricing
pressure. <\/P>
To combat this ASBIS have focused on trying to understand their customer's
requirements holistically. Despite the margin erosion our customers are still
demanding extended payment terms; quality, stylish and innovative products;
choice of brands; next day delivery and immediate turnaround on warranty goods.
One of our recognised strengths has always been combining extensive knowledge of
our local markets with the primary objective of bringing value to both our
customers and suppliers. <\/P>
By focusing on developing and strengthening these relationships it enables us
to offer our clients individual components or complete solutions. Simply we have
a unique pre and post sales service that differentiates us from other IT
distributors. We can gauge that this approach is working very successfully by
the loyalty of our customer base and the continuous business from them. This is
further demonstrated by the number of new customers we have acquired in 2006.
<\/P>
Also as ASBIS Ireland is part of the ASBIS
Group<\/STRONG> , which serves 25 countries.
The Group purchases directly from manufacturers and possesses a strong
purchasing power, as it buys large volumes for all ASBIS offices in the EMEA
region. This buying power proffers ASBIS Ireland with real competitive advantage
and we are able to offer real competitive prices on a comprehensive range of
products. The current product portfolio encompasses over 15,000 products.<\/P>
We think customer expectations will continue to grow
and market forces will continue to erode margins. The challenge for ASBIS will
be to maintain our phenomenal revenue growth, maximise shareholder value and
continue to build on our successful relationships with both suppliers and
customers.<\/EM>
<\/P>
– Has the Irish distribution market become more or less competitive
over the last two years?<\/STRONG><\/P>
The market has become much more globalised as the Internet has made
information freely available to everybody. It has been instrumental in helping
to educate buyers with detailed technical information easily accessible and for
facilitating the comparison of prices and brands. Customers and end users are
more likely to consider buying from other countries especially if price is the
key differentiator.<\/P>
ASBIS believe that understanding the true cost
of ownership<\/STRONG> is often
overlooked by the buyer. By only focusing on bargain hunting and seeking the
lowest price, factors including after-sales service – such as technical support
and warranty, and payment terms – cost of cash versus credit and currency
exchange rates should also be considered in the decision making
process. <\/P>
We believe customers should look for the best price but
with the full service surround. At ASBIS we focus on innovation, style,
quality, price, service and support.<\/EM>
<\/P>
The retail channel has now become a major route to market and the
constriction of the traditional IT channel. Reviews of our advertising campaign
have helped us to identify more opportunities to move closer to the consumer
electronic market. <\/P>
At ASBIS we believe that the current market view of the
opportunities for IT and audio-visual convergence<\/STRONG> is a narrow We have also been working closely with some of our key manufacturers in
designing packaging that will create enhanced shelf impact. Canyon in particular
have now created a series of new package designs that we believe will make a
significant impact on growth for their products. Not only is the visual impact
important but also the quality of the packaging and when this is complemented
with the facility to actually be able to view the product in the
box. <\/P>
Our biggest growing market is lifestyle
products<\/STRONG> and this includes products
such as: <\/P>
Prestigio
Net Drive<\/A><\/STRONG> – instant and safe remote access to your data wherever
you are; – Have UK-based distributors lost or gained market share in Ireland
since 2005 – and does the VAT issue give them a head start?<\/STRONG><\/P>
We believe that the UK-based distributors seem to have a
cherry-picking strategy at the moment where they court the larger customers but
this often means making less margin and offering longer payment terms. We have
maintained a healthy growth rate in the last few years – ASBIS Ireland\u2019s
profits increased by 449% in 2005, turnover increased by 44% and the number of
customers increased by 63%<\/EM>
. We have placed greater focus on market intelligence, database marketing and
marketing communications. It is absolutely paramount that we strive to offer our
customers the best choice of products at the right prices. <\/P>
In terms of revenue our top 10 are INTEL, AMD, PRESTIGIO, SEAGATE, HITACHI
GST, CANYON, PQI, LITE ON, MICROSOFT and SAMSUNG <\/P>
– How would you describe the relationship between distributor and
reseller in Ireland?<\/STRONG><\/P>
One of ASBIS Ireland\u2019s USPs has always been combining extensive knowledge of
our local markets with the primary objective of bringing value to both customers
and suppliers. By focusing on developing and strengthening these relationships
it enables us to continue to offer our clients individual components or complete
solutions. Simply we have a unique pre and post sales service that
differentiates us from other IT distributors. <\/P>
We have initiated a series of incentives including a loyalty programme to
reward customers for spending with us. This has a series of revenue spend
thresholds so that small, medium and large customers all have the opportunity to
be rewarded for their business.<\/P>
We liaise closely with manufacturers to introduce and stimulate demand for
new products. Some of these include advertising, prize draws, special offers and
bundle offers. An advertising campaign has been developed which is targeted at
both trade and end-user publications. More focus has been placed on increasing
pull-through from the end user so that profit can be achieved right through the
supply chain. Adverts have been placed nationally and locally. <\/P>
This has been complemented by product reviews in magazines such as Stuff and
also with direct mail advertising. This coordinated campaign has helped to
firmly establish ASBIS as a recognised IT distributor of most major brands. This
has also been instrumental in creating the opportunity to broaden the ASBIS
portfolio with recent agreements established with ViewSonic and Gigabyte to
distribute their products. <\/P>
– How would you describe the health of the Irish
distribution market?<\/STRONG><\/P>
– What have been the most significant market developments over
the last 2 years?<\/STRONG><\/P>
interpretation of where the true market
potential lies. Most distributors appear to be just selling televisions and
projectors. At ASBIS we believe in the holistic lifestyle
approach<\/STRONG> where home, leisure and
office are all interlinked. The
Prestigio Net Drive<\/A><\/STRONG>
is a fantastic
example of this concept. It provides instant and safe remote access to your data
wherever you are. Whether this is business or personal files and multimedia
content \u2013 it can all be easily and securely shared between PC users in the
office or at home, via LAN or even via the Internet!<\/P>
Prestigio
Data Safe<\/A><\/STRONG> \u2013 stylish portable external storage device from
40 GB to 120GB;
Prestigio\u2019s
Portable Multimedia Recorder<\/STRONG> <\/A> \u2013 a compact device
with 3.5\u201d LCD screen for watching films and listening to music;
Prestigio Digital Media
Centre<\/A><\/STRONG>
\u2013 unique all in one digital device which can facilitate all
the computer and multimedia requirements of home or office users;
Prestigio LCD
TVs<\/A><\/STRONG>
;
Canyon\u2019s GPS Outdoor Trainer which provides a full-sealed
waterproof (IPX7) and large LCD wrist watch device, as well as GPS navigation
function with a physical training system;
Canyon\u2019s Digital Multi Functional
Pedometer which is a step counter, shows distance travelled and calories burnt
and has a clock and radio!
Canyon Platinum Card \u2013 state of the art
storage device from 1GB to 4GB
Canyon MP3 players. <\/P>
– Which vendor accounts for the majority of your
sales?<\/STRONG><\/P>
By working closely with some of our key suppliers \u2013
Canyon, Prestigio, Seagate, ViewSonic and AMD<\/STRONG>
we have created a suite of products that are unique
and have generated strong demand for their innovation, style, quality and price.
Canyon and Prestigio in particular have designed a number of products such as
Canyon Packs, Canyon MP3 players and Prestigio LCD TVs that have extended the
ASBIS portfolio and developed a strong brand awareness that has stimulated
interest and increased demand for other products within these brands. <\/P>