| Company Profile: |
Battered and Bruised ...but its B2B website for resellers was a resounding success in improving transparency and reducing costs Lightning never strikes twice. But for Ingram, it kept on striking in FY10 as some of its worst anticipations came true. But that also meant that they could ‘anticipate’ some of the reversals and accordingly focus on improving internal efficiencies. The direct and maximum impact on revenues was owing to the dip in the telecom business, the number two business in FY09. Sony Ericsson deciding to move to the high-end products segment meant it was no more playing on the high volumes market, and this consequently had a direct bearing on its contribution to Ingram revenues. IT business too was flat—consumer product categories in the systems segment were badly hit by the slowdown; commercial business slowed down from Q2 onwards and the PC business bore the brunt of the corporates, and the much-touted government sector going into relative inactivity. Ingram also gave up some share of the Intel and Seagate business, as they were not turning out to be profitable enough. And last but not the least, there was considerable pressure on the working capital as most vendors who had extended credit periods withdrew it by Q3. While most of these crises were anticipated, HP’s decision to move from a national to a regional distribution model for its consumer PCs came as a bolt. In order to establish a more direct control on its retail setup and reach more consumers directly, HP (Ingram’s largest vendor) reduced the billing for Ingram. And even as Ingram refrained from doing Microsoft business over the software double taxation issue, Microsoft promptly sidelined it and appointed Rashi, Compuage and Neoteric to increase its Microsoft Operating License Products business. It was not all doom and gloom though. Its B2B website for resellers was a resounding success in improving transparency and reducing costs of doing both stock sales and run-rate business. Ingram took a lead on this in the Indian market and in FY10 30% of its business happened through this website. There was an increasing focus on high value low volume businesses like Adobe, Autodesk, IBM Software, Oracle, Fortinet, Juniper, Symantec, McAfee and Trend Micro—that offered high margins. But it were the newer areas like AIDC, PoS and surveillance that showed great promise with Ingram signing up a number of niche vendors. |
