Rabyte Electronics has been a leader and innovator in the distribution and marketing of advanced technology semiconductors, passive components, interconnect and electromechanical components, displays and modules from various reputed manufacturers across the world for the last two decades. The company has evolved to become a single window source to its customers, addressing their need for electronics solutions, that is, electronic components, design services, box build solutions and supply chain management. Rabyte presently caters to its clients all over the world from a wide spectrum of industries, which includes automotive electronics, consumer electronics, industrial electronics, IT, telecom, etc. In a conversation with Srabani Sen of Electronics Bazaar, Rajiv Batra, managing director, Rabyte Electronics, speaks about the company’s strategy to stay ahead of its competitors.
EB: Your website says that you are an innovator in distribution and marketing. What are the strategies you follow to stay ahead?
We provide innovative solutions to companies who want to introduce new products in the market. We work with these companies to give them the best solution for their product. The entire designing of the product, including the hardware and the software, is done by us. This is a new and demanding trend, which will keep us ahead of our competitors.
EB: So this means that you not only provide components but also solutions to your clients?
Yes. We are now focused on providing complete solutions to our clients rather than just the components. It’s like a one-stop-shop for our clients.
EB: How do you choose your principals? Is it based on their brand names or is there some other criterion?
We choose our principals based on their areas of strength and how they complement each other.
EB: What are Rabyte’s strengths?
At present, our strength lies in providing complete solutions and on-time delivery of large number of components from different principals.
EB: Do you maintain stocks based on your customers’ requirements?
Absolutely, we see what is moving in the market. It is not that everything is kept in stock; but some items that we call fast movers, are stocked.
EB: Apart from providing solutions to customers, do you provide any other value added services?
If any customer needs technical support, we provide it through our offices located all over India. Also, we help in solutions designing without charging for it. We judge our customers on how far can they take their projects forward. Accordingly, we support them.
EB: What are the current global trends in the components trading industry?
Components trading nowadays is heavily dependent on a company’s design capabilities. If one can successfully design solutions for customers, then one can successfully sell components as well.
EB: EMS companies are also doing design work, and now with components suppliers taking up this task, has the work of EMS companies reduced with their business going to the components suppliers?
EMS companies have a very small role in designing. Earlier, all solutions were given by components manufacturers or the EMS companies. Now, they want the distributors to do the designing because they don’t want us to just sell parts replacements. In India, the distributors are gearing up to take up designing and are able to do it. But when compared to China, we are still very far behind; in China, the market is big and hence the demand is also immense.
EB: Rabyte is a company to company distributor and is not into retail. What are the benefits of following this business model?
The benefits here are that you get more definite commitments from original equipment manufacturers (OEMs), original design manufacturers (ODMs) and factories.
Solutions cannot be sold from traders to traders. So our major customers are the OEMs and the ODMs.
EB: As India still hasn’t picked up in component manufacturing, the distributors are doing good business. Where is this business mainly coming from?
We are getting business from local as well as multinational manufacturers who have their factories in India.
EB: What was your growth like in the last 2-3 years?
We have been growing at the rate of 15-18 per cent for the last few years.
EB: How has the depreciating Indian rupee and slowdown in the US affected components distributors in India?
We are definitely suffering because of these fluctuations in the market. Compared to last year, it seems difficult to see ourselves growing beyond 10 per cent.
EB: What’s your forecast for 2012-2013; do you think the market will pick up?
We hope that it will, but it’s too early to say anything. For this, we need to be sure about the situation in Europe as it is going through a crisis at the moment. I believe a clearer picture of Europe will emerge by the end of March, this year.
EB: Do you have any plans of starting up a facility in China or anywhere else?
No, we don’t have any plans to diversify at the moment. Our focus is on components trading and to provide designing solutions.
EB: The National Policy on Electronics and the draft National Policy on Manufacturing both don’t include any incentives for the components traders. What is your take on this?
I feel that the government agencies in India have still not been able to see the importance of traders. Component traders have now become organised and are big companies. So, I think the concept of a trader has to change. I think they should look more closely at what traders do and what value they add to the electronics industry in India.
EB: Why is it more cost effective to manufacture in China than India?
The main reason is the high volume production in China. But what I am seeing these days is that the trend is shifting towards India. Since the labour costs have gone up in China, compared to India, it has become more cost effective to produce in India. But India has got its own set of problems like red tapism. I hope we are able to solve these problems soon.
EB: What is your take on the ‘China plus one’ strategy?
I think manufacturing will come up in India; there are so many new companies that are going to set up their units in India. ELCINA and DoT estimate that, between 2015-2018, India’s electronics components market will be bigger than China’s. Maybe the government can see something happening that we can’t envisage, and I hope it happens.
EB: What is that one major challenge that you face as a trader in India?
The challenge is—where to sell? Because India hasn’t taken up manufacturing on a big scale like China.
EB: What are your plans regarding expansion?
Expansion is underway at Rabyte. We are going to launch a standalone design house this year, which will only provide design solutions.
