“One needs to strike a balance between volumes and margins to be successful in distribution”

As the newly-appointed COO of Ingram Micro, SP Rajguru has his hands full orchestrating a major restructuring of the distribution house. He is presently working out several new strategies to strengthen the company and increase its marketshare, with a primary focus on B and C-class cities. The company has targeted 30% growth for the current fiscal. Vesta, Ingram’s self-owned brand, is also up for a revival. In an exclusive interview
his first ever to the media after taking over the top job at Ingram Rajguru shared his gameplan and roadmap for the company with
DQ Week.

What are the new strategies being worked out by Ingram to increase its market share?

We recognize that “ease of doing business” is the key to success in this dynamic market and have taken several initiatives towards the same. To start with, we have restructured the sales operations into smaller and more manageable units. 

Instead of the erstwhile four regions, the sales operation is now divided into seven zones. North, South and West will have two zones each, while the Eastern region will have one.

Does this mean that your focus is more on non-metro areas now?

The prevalent trends clearly show that the new phase of IT growth in India would come from non-metro locations. This bifurcation shall help us to manage our sales, profitability and vendor market shares on a micro level. Each of the branches are now recognized as profit centers with clear commitments of profitable growth.

With business in metros registering lower CAGR, most vendors are also looking at infusing growth through upcountry expansion. And it is here that our partners and we complement each other´s strengths. All this is further augmented by the creation of web-enabled services for our channel.

With distribution being a high-volume game with extremely low margins, what initiatives have you planned to maintain topline and bottomline growth?

Distribution is a tight ropewalk. One needs to strike the balance between volume and margins to continue walking. We are also adopting proven business practices from across the world and fusing them with the Indian scenario. Our focus would be to build volume products like Intel, Seagate, Samsung, HP peripheral/supplies etc as traffic builders while the margin support comes from value-added products.

‘Six Sigma’ is one such initiative, which is adopted to weed out dead-wood processes, making the system trimmer and more efficient. This reduces costs and improves productivity, manifold.

Is Ingram content to remain as a fulfillment agency or would you want to go beyond that?

Fulfillment would certainly remain the backbone of any distribution system. The idea is to make room to accommodate value-added distribution. The formulation of a strategic account team (IMSAT) is a step in this direction. 

A core team is onboard working with the partners on large and strategic accounts where Ingram is more than a distribution partner to them. On one hand, we bring the value addition of opportunity identification and management to our vendors. On the other hand, we participate in the entire sales process with channel partners, supporting them on pre-sales, commercial bindings and logistics. We are also looking at consolidating ourselves in sales of packaged services from different vendors.

Not much has been heard about your own brand–Vesta. How committed are you to this brand?

Our commitment to Vesta is 100%. Vesta is our brand and we would like to build strong brand equity around it. We have recognized the gaps that existed within Vesta in the past. At the moment, we are putting a comprehensive sourcing and marketing strategy to aggressively position it as a preferred brand amongst consumers as well as the channel.

The brand portfolio is also being expanded to give customers product choices as well as value propositions. Recently we added a whole set of business desktops, notebooks, UPS systems and gaming kits to address a wide spectrum of customer needs. On the launch-pad are Wi-Fi and other new technology products.

We want Vesta to translate as value for money buying for our customers, with total peace of mind.

In recent times, partners especially in the B and C-class cities–are increasingly blaming distributors for warranty and support issues. How far do you think are distys responsible for the same?

There have been some incidents on issues pertaining to warranty and support, especially from B and C category cities. I think that any distributor would have a very limited role in addressing this pressing concern. The DoA, RMA and reverse logistics are subjects that vendors will have to take up more seriously in their effective implementations. 

We have made suggestions to some prime vendors on this issue. They are actively looking at improving the service levels in these growing markets. We are also looking at the role we can play in this area.

In the last few months, Ingram Micro has been at the receiving end as far as its channel policies are concerned. Not many partners seem to be happy with the company. Do you agree with this?

Our feedback from the channel points to the contrary. Our policies and performance in the market has been very conducive to channel business. Whether on commercial terms, pricing or credit, we have always seen that channel interest is not adversely affected within our policy framework. 

Besides, we have also contributed in bringing the channel community together, through our annual Ingram Showcase event, which is an unique platform for vendors and channels to have a constructive interface. 

Several other successful programs like “Run For Rewards” are also marking our unique stature amongst the channel fraternity. We have also patronized channel activities hosted by few state channel associations.

ASIM RAINA  and S GOPIKRISHNA 
in Delhi