The Indian IT distribution market holds immense potential for market players seeking growth opportunities. In recent times, this market has witnessed a notable upswing, empowering IT distributors to accelerate their expansion. One such leading market player, Ingram Micro, has achieved remarkable progress in the Indian market, demonstrating substantial growth over the past few years.
Navneet Singh Bindra, Senior Vice President and Chief Country Executive of Ingram Micro India Pvt. Ltd., expressed his views on the market's growth. While talking to DT, he said, “The Indian IT distribution market has been experiencing quite a ride in the last couple of years globally, however, we hope that 2023 will be a promising year. As organizations across verticals need advanced technology-led business solutions, it is perceived that the IT distribution market will continue to grow in the years to come. However, we must not forget that many organizations are still a little reluctant to invest in technology evolution, and that’s what we need to be watchful about.
He further added, “Besides the scope and need for IT-led solutions, there are several other critical factors, such as economic conditions, government policies, technology trends, and market dynamics, that can potentially influence the growth rate of the distribution market. Though there has been an unequivocal focus on the digitalization and modernization of the IT landscape across government-owned entities, we will have to monitor closely how these initiatives will create new avenues of opportunity for IT distribution businesses.”
Major Challenges For Distribution Market Players
As the Indian IT distribution market continues to expand, it presents a compelling opportunity for distribution houses to accelerate their growth. However, there are still some challenges that distributors face in this journey. When asked about the current challenges, Navneet said, “There are scopes for growth and expansion for any IT distribution company; however, it’s high time we start identifying the areas that need urgent attention for better preparedness. Not long ago, the world witnessed an unprecedented outbreak of a contagious viral infection, and this caused a colossal supply chain disruption. The distribution company must figure out a way to counter and mitigate the effects of such disruptions caused by natural disasters, global pandemics, political instability, or territorial disputes.”
“Besides such an unanticipated disruption, there are several other aspects that distribution companies must approach meticulously. These include keeping a close eye on emerging market trends, changing customer expectations, the evolution of technologies, varying regulatory guidelines, and growing channel complexities. The market is stiffly competitive, and distribution companies should come out with a more success-driven strategy to differentiate themselves by offering unique value propositions and remaining competitive in terms of product range, delivery speed, customer service, and pricing options.”
“To survive and thrive in the competitive digital era, it is an absolute necessity to invest in and integrate the latest technologies, such as warehouse management systems, ERPs, analytics, and so on. Additionally, distribution companies must also embrace a more holistic approach to inventory management to meet customer demands on time while avoiding excessive stocks and/or stockouts. This can be accomplished through accurate demand forecasting, effective procurement strategies, and streamlined inventory management processes. No matter how simple these strategies may sound, distribution companies will have a difficult time aligning their objectives with the ever-changing market dynamics.”
“Apart from all these, increasing environmental concerns and rising awareness among end users or consumer compel IT distribution companies to adopt more sustainable practices. Therefore, IT distribution companies should start paying attention to reducing carbon footprints, optimizing packaging, embracing green logistics, and promoting more responsible business strategies. Embracing such a large-scale transformation in business practices can be quite a daunting task for any aspiring business,” added by Navneet.
Key Segments Witnessing Higher Growth
The Indian IT distribution market is experiencing a surge in growth driven by increased demand for IT products across various sectors. This upward trend indicates promising prospects for the market's growth in 2023. Navneet said, “While opportunities are galore, organizations have started taking cost rationalization very seriously in the last couple of years. We have witnessed how organizations, irrespective of their size and nature, are showing interest in cloud-based solutions. There is an increased demand for cloud computing, digital solutions (AI/ML, IoT, RPA, etc.), cybersecurity, analytics & intelligence, and vertical-specific solutions. However, their approach towards cost rationalization and process optimization does influence their decision to invest in the latest technologies. So, IT distribution companies must package and distribute cloud infrastructure, IaaS solutions, SaaS applications, PaaS offerings, and digital solutions at an attractive price.”
“We must also note that organizations will continue their transformation journey, and there will be rising demands for digital technologies such as AI/ML, IoT, automation, and so on. On similar lines, there will be more focus on harnessing actionable insights from data. As per the trends, organizations have already started looking for analytics and digital solutions, and IT distribution companies must start distributing market-ready digital solutions for these organizations.”
“However, you need to be observant about the profitability margins on digital solutions, software, tools, and platforms that are empowered with capabilities around AI/ML, IoT, analytics, data management, visualization, and so on. Similarly, with the rising prominence of cloud environments and increased technology adoption, there has been an increase in demand for cybersecurity solutions as well. IT distribution companies should expand their portfolio and help organizations assess and reinforce their security posture in a robust way. Distributing cybersecurity solutions, network infrastructure, firewalls, and encryption solutions can be moderately lucrative for any distribution company,” further added by Navneet.
Growing Refurbished IT Product Market
The rise in demand for refurbished IT products will have a positive impact on the distribution market in the long run; however, things may not appear too favorable initially. “It’s true that the increased demand for refurbished products has expanded the market reach, driven cost-conscious customers/consumers, supported sustainability efforts, and encouraged product lifecycle extension; however, every proposition comes with an inherent set of challenges. Without an iota of confusion, the refurbished IT products market compels distribution companies to modify or upgrade their existing models and establish robust refurbishment processes. This requires some upfront investments to stay more relevant to new-age customers and meet their evolving needs in a competent and responsible way,” added by Navneet.
“And yes, I strongly believe that tech brands should ride the wave! In fact, every forward-looking company should establish effective and transparent refurbishment programs, which include collaborating with an expert refurbishing company as well. Tech brands must ensure that their refurbishment processes are transparent and that customers are apprised of all the procedures, including testing, repair, inspection & audit methodologies, and quality control measures. Additionally, there should be no compromise with the quality of customer service and warranty coverage. All these strategies and actions can help tech brands build trust and confidence among customers and stay afloat in the emerging refurbished IT products market,” concluded by Navneet.