Innovation Plays

REDINGTON INDIA

It was a tough H1 for Redington that saw severe pressure on margins as vendors reduced rebate offerings. Moreover, the accounts receivables condition remained tough with longer collection cycles for most projects; add long closure periods in the commercial business and the overall sluggish market conditions. And then the likes of HP and Microsoft reduced billings-while HP focused more on regional distribution for consumer PCs, Microsoft opted for other national distributors to increase its MOLP business when Redington along with Ingram took it on over the software double taxation issue.

In these trying times, Redington faced the market conditions by putting in place a multi-pronged strategy. It assembled a strong project team and focused engagements with all partners active in the government business space. This paid off with good deals on the networking side coming from the government. Moreover, adding key vendors to complete product bouquet offering like Oracle beefed up its enterprise portfolio. New principals like Avaya and Brocade, who signed Redington as national distributor started contributing in FY 10 itself-enterprise and networking accounted for 11 percent and 8 percent of Redington revenue respectively. Yet another critical enabler that enabled Redington to sustain its business was its funding program under Easy Access Financial Services, its wholly owned NBFC, that brought in the much needed working capital to channel partners.

Process efficiencies significantly went up after its Automated Distribution Center (ADC) in Chennai went live and became fully operational; coupled with its state-of-the-art warehouse management system, it significantly enhanced Redington's distribution process. The company scouted for prospective customers from FMCG and automobile industries, amongst others, for providing 3PL activities out of this Chennai ADC. There are plans to have these ADCs now in four metros for which Redington invested about Rs 150 crore. It now plans to complete the land purchase for the Mumbai ADC by year end and then commence construction of Kolkata and Delhi ADCs soon sequentially.

Highlights

• 3-PL activities gathered further steam in the Chennai ADC
• Signed on Blackberry for exclusive distribution in the unlocked space