Redington India : Shifting Towards Services

Redington India decided undergo a transition to becoming a true value-added
distributor. While its topline grew by 10 percent in 2007-08 to touch Rs 5,527
crore, the services business contributed Rs 86 crore to this turnover. This is a
substantial increase from Rs 58 crore in 2006-07 and Rs 38 crore the year
before.

Besides this, it also acquired Easyaccess, a non-banking financial company,
to facilitate support for its select partners. This was the first of its kind
venture by any distributor in India, which will encourage more dealers to grow
their business. Redington invested around Rs 80 crore in this project and is in
the process of disbursing a few thousand crore for financing the channel.

The relationship it maintained with its vendors and channel partners paved
the way for this growth of the company, post its Initial Public Offering (IPO).
Even though the system integrators complained of the sluggishness in the
components business, Redington's component division contributed around 17.5
percent to its overall revenue, which was the third highest contribution after
peripherals and systems division that contributed around 32 and 21 percent,
respectively.

The highlight of the year was that the company didn't lose even a single
vendor from its list but was able to add more principals like Cyberoam, Genius
Peripherals, MGE UPS, Sonicwall and Adobe to its portfolio.

The Adobe tie-up is considered to be the most critical one for Redington and
the vendor, because it would increase the distributor's strength in the packaged
software arena, which contributes 8.5 percent to its overall revenue. And for
Adobe, there are considerable opportunities to deepen its penetration in SMBs
and upcountry regions with the reach of Redington in both the areas.

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Profile
President-IT Division: PS Neogi Start-up year: 1993 Employees: 1,800 Collaborations: IBM, Intel, APC, Apple, Siemens, Sun, Xerox, HCL, Hitachi, Cyberoam, Genius Peripherals, MGE UPS, Sonicwall, Adobe Address: SPL Guindy House #95, Mount Road, Guindy, Chennai - 600032 Tel: 044-42243535 Website:www.redington.co.in SILVER CLUB RANK (2006-07): 2

Last fiscal saw Redington expanding geographically in the upcountry regions
as it increased its billing locations from 53 to 49, including far-flung cities
like Shimla. Through the 'hub and spoke' model that it practices, Redington
plans to be present in another 50-60 locations by the end of FY 08-09.

Another achievement for Redington was its successful positioning of ViewSonic
monitors in the market, after facing several ups and downs in the past. Other
highlights of the year was bagging a Rs 90 crore CBAC project for TCS followed
by a BEA order from HCL worth Rs 20 crore and Rs 10 crore project from Hindustan
Lever.

Just after the end of 2007-08, Redington started a new activity for the first
time by any distributor-organizing a computer expo, in Chennai along with its
principals and channels in order to overcome the slowdown that the channels
faced and to increase the mind share of its principals among the end-users. It
also plans to replicate the expo in all major cities across the country.

The ability to manage its diverse portfolio comes through the business model
of focusing on specific small business units. Each of these have brought in lot
of ownership, realization of incremental cost vis-à-vis increasing productivity
and optimizing on specific objectives related with specific business.