Customer requirements and providing flexible purchase options are what bigger players in the component distribution game seem to put maximum focus on. Navin Honnavar, senior marketing manager-South Asia, element14, talks to Baishakhi Dutta of the Electronicsforu.com Network about the firm’s flexible purchase models and its plans for the future.
EB: What unique aspect about your company benefits your customers the most?
Today’s customers need the best of both worlds, and we offer that.
We provide customers with the specialised capabilities they need as they bring products to market, and do this through all the stages of the product’s life cycle. And we also provide the scale, size and the global reach of a broadline distribution business when their needs grow. We offer customers technical support and add-on services such as ‘maker to market’ and specialised design kits to accelerate the development of their designs. For suppliers, we offer award-winning marketing support for their products as well as access to a very wide range of customers from diverse industries.
Being part of the Avnet ecosystem also allows us to support customers in a unique way. By monitoring buyer patterns, we can identify when customers are moving into the next phase of their journey and introduce them to our group’s business, which can support them as they grow further. This means that customers no longer have to identify, review and on-board a new partner at every phase of production, hence reducing the time, costs and the complexity of bringing products to market.
EB: What’s your strategy with respect to keeping ready stock of in-demand products for your customers?
Over the last two years, element14 has invested significantly in stock and added over 40 new suppliers, to both broaden and deepen its product range. We know that it is important for our customers to access products quickly. If they are in the middle of a design, they don’t want to wait weeks for an alternative part that they want to try out. Also, we focus on bringing the latest products from suppliers first for our customers. This helps them bring to life products with the latest designs.
EB: Do you cater to startups who may not have orders matching your MoQ or minimum order quantity?
We work with startups across the globe to support them as they bring their designs to market. One great example is India based Graspio, a firm we worked with to optimise its design and bring it to market.
EB: In which cities do you have offices? How do you cater to customers who are located outside the cities your offices are in?
We have offices in Bengaluru, which is our India HQ, and in Hyderabad, Chennai and Coimbatore in the South; in New Delhi in the North; in Kolkata in the East; and in Pune, Mumbai and Ahmedabad in the West.
Also, we have a tele-sales team and 24×5 tech support with online live chat to support our customers. Our website offers rich technical content, complete product details and descriptions, data sheets and 3D images, all of which make it simple for our customers to order with ease.
EB: Do you set any minimum order quantity requirements for your customers?
We focus on design engineers and do not have minimum order quantities (MoQs), which means that customers can access small quantities to include in their designs, quickly. Since there is no requirement for MoQs, customers can order what they want without relying on samples.
EB: Do you have a team to help customers in designing their products?
We have a technical support team based in India that is available 24×5, which works with customers to support them with their technical queries. For customers looking for a greater level of support, we have design services that can be accessed, and have design engineers in the United States and China who can work closely with customers as they develop their designs.
EB: What are the top three qualities that you would advise customers to look for in a sourcing partner?
The customers should only buy products from authorised distributors who offer traceability. Other criteria would be to choose sourcing partners who have a local presence and offer support during the local time zones. And, of course, they should look for partners who can support the local rupee pricing and help deliver the products at their doorstep after clearing customs, so that it makes it easy to place orders.
EB: How do you see online sales affecting the component distribution business?
One of the main benefits of online distribution is that this model of doing business promotes solutions from multiple suppliers, giving customers choice, and making it easier for them to compare and contrast the relative benefits and features of different suppliers. We see a growing proportion of business coming through online sales, and in order to support customers in their purchases, distributors need to change the type of information included on their websites. They need to provide greater information for customers to research and make decisions.
While it used to be acceptable for the Web page of a product to have a simple title, some basic specifications and a data sheet, users now expect to see much more than that. They need richer basic information (enhanced titles, multiple high-resolution images, features and benefits, more text, etc), advanced content (360º images, product videos, CAD models) and user-generated content (user and expert product reviews, community/social information, etc). As a result, distributors have to work harder on collecting, creating and serving up this information.
EB: How fast has your organisation grown in the last financial year?
Market conditions during the second half of the fiscal year 2019 contributed to a flat global revenue performance for Farnell (element14’s parent company) at US$ 1.5 billion, albeit alongside year over year growth in operating income and operating margins.
The previous fiscal year had seen a strong performance with global revenues of US$ 1.5 billion, up 11.1 per cent year over year (+6.5 per cent year over year on a constant currency basis, and consecutive year on year growth each quarter in Asia-Pacific).
EB: What is your business’ core ideology?
We believe in offering a differentiated customer service. We keep the customer at the centre of everything we do. This has helped us to develop a model, which ensures that customers can order products from the global inventory and get it delivered to their doorstep, at the click of a button.
EB: What business strategies have you adopted in the last financial year to improve engagement with your customers?
We have continued to invest in improving the customer experience and the overall value proposition that we bring to the market. We now hold more stock than ever before across our global distribution network, providing customers with access to components, as they need them. The addition of 20 new supplier franchises during the year, including significant additions such as Renesas, means that customers can continue to rely on Farnell for the latest technologies to further their design journeys and bring their products to market.
EB: What are your key focus areas for the next financial year?
We are focused on:
- Newer IoT based development kits to customers, to enable them to design for the latest in-demand products.
- Offering a wider range of interconnect and eMech catalogue products, given the thrust of the industry and the government on local manufacturing.
- Expanding our test and measurement range, to ensure we have the latest products in stock every time.
EB: How can the government further contribute to driving electronics manufacturing in India?
Given the scenario of the trade war between China and the US, India must take a lead to promote local manufacturing. The GST was the first step in that direction. But larger policy decisions to push electronics manufacturing must be supported. India has the potential to be a global leader in aerospace and defence as well as industrial automation, and in newer technologies like IoT, AI and machine learning. But this can only happen if the government and the industry work in tandem to seize the opportunities that the market has to offer.