Top 25 Distis: Redington India

SILVER CLUB RANK (2010-11): 2

For Redington, FY11 started on a bumpy
note with the biggest vendor on its portfolio HP changing its PSG
distribution model by adding more regional distributors for better
profitability. It also ended domination of national distributors
(NDs) of HP like Redington and Ingram, as in the new model they were
bound by geographical restrictions. However by year-end, there has
been a partial rollback by HP as it replaced the telecom partners and
brought back the NDs into its fold. The impact at the end of FY11 was
evident with Redington's peripherals and consumer PC slice going
down to 15% as compared to 25% the previous year. But Redington, just
like Ingram, was able to minimize the impact by deepening its
engagements with other vendors like Acer, Lenovo, Toshiba among
others that acted as a savior for the consumer PC business. That
apart from the good traction in infrastructure project business
(again like Ingram) with major e-gov projects, acted as a key growth
driver during FY11. For instance, Redington's tie-ups in the
biometric solutions space resulted in key wins in the UID project.
The biggest growth story happened in non-IT with BlackBerry
smartphones and Apple seeing impressive momentum during FY11. In
fact, Redington also helped set up BlackBerry 'experience zones'
in key locations.

With working capital, managing credits,
and recovery being one big challenge for the large NDs, Redington's
fully owned NBFC aimed at providing financing support to the IT
channel partners, proved invaluable. It also moved away from being
Redington centric to a more neutral channel financing company. In a
recent development Standard Chartered Private Equity picked 12% stake
in Redington India and that might have an impact on Redington's
future in FY12.