Premier Farnell is a leading multi-channel, high service distributor of electronic components, electrical parts, industrial and maintenance and repair and operations products. It supports millions of engineers and purchasing professionals throughout Europe and Asia and recently participated in a survey conducted by the Electronics Bazaar research bureau to assess the impact of the global recession on the electronics sector in India. On the occasion, Mr Salman Syed, director, Asia Pacific (APAC), Farnell, spoke to Sudeshna Das of Electronics Bazaar about the company’s business-augmenting strategy for its India business and how it plans to stave off the economic lethargy that grips the business world today
We have identified India as a prime growth area and a key market in which to drive forward our strategy for profitable growth through focus on the electronic design engineer (EDE) segment, the web, maintenance, repairs and operations (MRO) product needs and the internationalisation of our business model.
EB: What kind of revenue target are you aiming for in the Indian market? Kindly share with us your investment plans.
We are targeting a 40 per cent rise per annum in the next three years and expect to grow at a much faster pace than the overall market. At Farnell, we have a growth strategy and a clear plan outlining how to execute it. It is what we have been concentrating on for two years and will continue to do so. We started the India business in February 2008 and we believe that was the best time to enter this beautiful country. We have grown by 21 per cent in the third quarter as against the second quarter. So far we have more than doubled our resources and have more than 70 employees in India across field sales, marketing, customer support and contact centre operations. We have also established a global technology centre in Bangalore to provide content and technical support to some of our global customers. We also continue to invest in multi-channel support to our customers in India through field sales and branch offices, contact centres, technical support and transactional e-commerce.
EB: Tell us about your India distribution model.
Farnell Electronics India Pvt Ltd, the wholly-owned subsidiary of UK-headquartered group Premier Farnell, is eyeing the EDE MRO market in India. The company, over the last 11 months has established a significant footprint in India. We have made strategic investments in India with operations cutting across nine cities. We also have set up a global technology centre in Bengaluru, the hub of design and development. We source inventories from our global primary distribution centres located in North America, Europe and Asia, bringing our Indian customers a very wide breadth of stocked inventory. We plan to make specific investments to improve our supply chain capabilities in India.
EB: Enhanced hardware manufacturing has penetrated India. How do you see it impacting Farnell’s business?
Farnell plans to consolidate its presence in India and engage more closely with its key customers—the potent segment of electronic design engineers. Despite the decrease in design cycles and the time-to-market difference, Farnell provides faster deliveries throughout India and local multi-channel technical support, which enables engineers to complete their projects sooner. Farnell has been able to provide expeditious delivery of the essential products that design engineers’ need with assistance from our extensive local call centres, regional and local distribution centres and technical support teams in Asia-Pacific and in the important emerging markets of China and India.
EB: What steps have you taken to create space for yourself in the Indian market? Who are your key customers?
We have in the last two months increased our product offerings. Currently, we are one of the largest stocking distributors for embedded products in the region, which includes brands such as Altera whom we recently won a franchise from. We have enhanced our services for the embedded design community in Asia-Pacific by increasing locally stocked embedded products to over 2,000 lines. Some of our reputed customers are GE, Philips, BHEL, Sony Ericsson, BEL, Honeywell, etc.
EB: How do you plan to combat the economic crisis while doing business in India?
We are extremely confident that our strategy is the right one and we will continue to focus on executing it even sooner that we earlier intended to. The investments we have made in people and technology have enabled us to be the “supplier of choice” among electronic design engineers. Threats in the marketplace are to be expected but we are focused on significant opportunities, especially in India. We have the strategy, the team to drive it and the agility to move at pace.
Today suppliers are greatly interested in our web and technology capabilities, our transitioning geographies and the changes we are making. As the market gets meaner, our suppliers will focus on those distributors whom they trust to deliver our primary goals—acquiring new customers and disseminating our technology and products throughout the design community. We are geared to deliver through our strategy and hope we’ve convinced our major suppliers of the fact that we can create real opportunity, even in these torpid markets. Staying close to suppliers and customers has never been more crucial than in the current climate.
Our business model supports small volume requirements and maintenance and repair needs for a variety of segments and sectors. It touches upon the education, contract manufacturing, government, defense, telecommunications, industrial power, transportation and energy segments. We have found that this model is quite effective for the SMB sections of India. We offer multi-channel (web, call centre and field sales) support to our customers to ensure maximum flexibility, access and high service. This approach allows us to win customers, especially in these economically retarded times, when companies are not stocking as much and have a real need to be innovative.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine