Mouser Electronics is a leading online distributor of semiconductors and electronic components, representing over 750 manufacturers. How the company brings about excellent growth, and successfully manages such a wide range of suppliers and their large inventory of products, is what Rahul Chopra of the EFY Group tried to find out during a chat with Mark Burr-Lonnon, SVP Global Service, APAC and EMEA, Mouser Electronics.
EB: How has Mouser’s business been over the last one year? What are the major growth markets?
This year, we grew 41.6 per cent globally. We are now a US$1.89 billion company. However, in 2001, we were next to nothing. Our business in North America continues to grow, with 35.4 per cent growth reported this year. We are growing even faster in the Asian market, registering a 48.7 per cent growth. Europe also contributed to the company’s success, putting up a strong growth of 45.6 per cent this year.
In Europe, the major markets for us are Germany, the UK, Italy and France. Germany alone contributed 40 per cent of our EMEA business. Our EMEA business at present is more than US$565 million.
EB: How’s your business growing in the Asia Pacific region, including India?
Our business in the Asian market is growing well; in India our business grew by 32 per cent this year. China and Japan are also our major markets, reporting growth rates of 57 per cent and 56 per cent, respectively, this year. Australia, where our business grew 16 per cent this year, has a lot of potential. We are now focusing more on marketing in the country. More and more global customers are finding us.
EB: How do you view the Indian market? Are you planning to expand your presence in the country?
The Indian market interests us in many ways. At the end of next year, we are planning to strengthen our team in Bengaluru, from the current number of 150 to 300 people. A year ago, we had only 50 team members.
Our India strategy is based around things like IT, back-end services and product content. We have introduced a lot of new things in India to expand the team. From the customer service standpoint, we have many data entry jobs (excluding calling) that can be done in India. In product content, we are trying to build up the Bengaluru office because it has good resources. The region has a huge number of people who are highly educated and passionate about electronics. The main thing is we get qualified people in India. It is not easy to find the same resources in other countries. In Texas, it is difficult to find people with a good IT background.
From the sales standpoint, we want to focus more on the Indian market. We will work closely with manufacturers to grow our business in the country. We are figuring out where we fit in the Indian market. Through India, we also cater to other countries like Bangladesh, Sri Lanka, etc.
EB: Are the Middle East and Africa contributing to your business?
The Middle East and African markets are not contributing much right now. We have business there, but it is miniscule. There is not much happening in the design and production of electronics in these markets. However, this may change with time. We have a little business in South Africa, Tunisia and Morocco. In the Middle East, Israel brings the best numbers for us, but there is not much business in other places like Saudi Arabia, Jordan and Qatar.
EB: Are you planning to expand in terms of physical space?
We are still expanding our physical presence. In March-April, we are planning to open four more offices —in Brazil, Poland, Vietnam and Philippines. We have a large warehouse in Texas, spread across 92,903sqm and there are plans to expand it further. We have already started the process of adding a few hundred square metres. We will also build an office at this facility.
EB: Is Mouser planning to open more offices in the ASEAN region?
Our business in the ASEAN region is served from our office in Singapore. Markets like Indonesia, Philippines, Australia and New Zealand are catered to through the Singapore office. We have an office in Thailand from where we cover Vietnam as well. We are not planning to open many offices right now, but we might probably come up with one in Australia next year.
There is no benefit of having offices everywhere. We have an office in Bengaluru that can cover the entire country. Similarly, we have one office in Shanghai to cover the entire Chinese market.
EB: What are the main products that make up Mouser’s inventory?
Regarding our product portfolio, about 50 per cent comprises semiconductors, 22 per cent passives and 18 per cent connectors. Passives are the key products in our inventory as these are hard to find in the market. We now have US$ 778 million worth of inventory and a million different parts in our stock.
EB: Do you follow any particular philosophy for inventory management?
We have the widest range of inventory to serve our customers. We also target new customers. Our focus is two-fold: New product introduction: When a supplier has a new product, we get it quickly and market it as soon as possible.
Breadth of inventory: For every supplier, we have the broadest inventory. This is not in terms of dollars but is the widest people can find in terms of numbers.
EB: What criteria do you follow while selecting products and companies?
First of all, it depends on the product. Hundreds of people come to us every day to sell their products. But we can’t sell every product. However, if it is an interesting innovation, which we don’t have in our portfolio, we definitely talk to the vendors.
We also get a lot of queries from people, asking for some quotations, products, etc, on our website. Based on their enquiries, we look for companies coming up with any new products that could satisfy their demand, and then approach these companies.
However, if someone comes to us and asks us to just sell their products, we probably won’t do it unless it is a brand new technology. Our aim is to take new things to the engineers and buyers. We keep on extending our product line. We have over 700,000 customers, and 25 million of the products on our website are viewed every day.
EB: Is it easy to find buyers for new products? Or do you follow any marketing strategy?
There are a lot of buyers of new products—around 40 per cent. Our existing customers also buy new products. However, our goal is to ensure a new product sells fast. We build all the marketing strategies before the product is launched.
EB: Any numbers you can share with respect to your website?
We get about 46 new customers an hour, which is almost one per minute. Around 370,000 people view our website every day. Two years back, we were at Number 4 globally, in Web traffic. Currently, we are Number 1, leading in website traffic. We spend a lot of time in driving our Web traffic.