Consumer IT interviews V.M. Chandrasekar, MD of Global Distribution FZE, nearly a billion-dollar global IT distributor based in Dubai
The IT world is changing with the speed of light and companies that fail to keep pace will simply die, says a key Dubai-headquartered IT distributor.
V.M Chandrasekar, founder-group managing director of Global Distribution FZE, spoke to us while on the occasion of his company’s international executive meeting. Chandrasekar flew in 25 key of his business heads from around the world for a three-day conference in Dubai to brainstorm innovative ways to ensure his company keeps changing with the times.
Established in 2001, the $900-million Global Distribution FZE operates in Europe (Germany, Austria, The Netherlands), Latin America (14 countries including Brazil, Argentina, Peru, Bolivia, Venezuela and the Caribbean), India and the Middle East. With a 35% year-on -year growth, it works through a network of over 50 offices, has 80,000 sq ft warehouse space and employs over 650 people worldwide. It deals in finished goods and components and its partners include top names such as Apple, Samsung, Dell, Lenovo, LG, SAP, Cisco, WD, Xerox, Seagate and others
In a Q&A session, Chandrasekar-- a man who has personally witnessed the IT space transform itself over the years-- brings us up-to-date with his views on the current IT distribution market.
What role does Dubai, and the Middle East, play in the global IT distribution market?
Dubai remains the regional IT hub and continues to be the hub of the IT export market. Africa exports out of Dubai are particularly strong. Iraq is doing well. Consumer spending has gone up tremendously in the last six months in the GCC, particularly in Kuwait, Qatar and KSA.
The Middle East market, as a whole, is one of the fastest growing markets in the world. True, the social and political instability in some countries have reduced their buying capability, but once stability returns, the market will definitely bounce back.
Whoever stays put now, in these very tough times, will be the winner once the market is back to normal.
What kind of support are you getting from financial institutions, given the global slowdown?
The banks have been very supportive to us. We are one of those companies who are headquartered in Dubai with a global reach. All our different revenue streams come and get consolidated in Dubai, so the local banks with whom we work get indirect presence in the foreign markets where we operate.
These are difficult times worldwide. How have you managed your growth?
Very fortunately, we operate across regions, so when one region is down, another is up, somewhat restoring balance for us. For example, Europe is stagnant right now, but both the Middle East and Latin America are growing. That allows us to distribute resources the right way.
Twelve years in the business, how has the environment changed?
When we started in 2001, the business environment was already conducive in Dubai. Today, it is even easier to start and sustain a business as far as regulations and infrastructure are concerned.
Of course, the IT business itself is the world’s fastest changing and most dynamic industry. The technology, the products and customer expectations have changed completely from the time we started the business.
How will you describe this change?
The landscape of IT is changing with the speed of light. Transforming into a different entity altogether. There is a rapid convergence between IT and telecommunications sectors. You are going to get everything you want, communication technology wise, in one device. And this device will become your most trusted companion – your advisor, assistant and best friend rolled into one good-looking handy product.
When such a transformation is happening, Companies that do not change with the times will go out of the market. They will simply die.
What is your survival strategy?
We are able to re-invent ourselves quickly. We have already diversified our channel reach and products and the way we market our products. We have now ventured into system integration and also IT Lifestyle stores in Middle East and India.
The consumer channel is going to undergo a major change worldwide. You have to be in the place where your customers are. So you have to go into Facebook kiosk, digital marketing etc
How are the various markets you operate in, outside of the UAE, different from each other?
In Europe today, e-tail is as important as retail. The Manufacturers are getting into e-tail and retail directly, skipping the channel. In India, organised retail is still weak and e-tail is just evolving. Traditional distribution will hold good for at least 2-3 years, as there are a lot of entry barriers. In the GCC, particularly in UAE, KSA and Kuwait, retail is getting very strong in reaching the customers. Latin America is more difficult to define, as it is a cluster of very different countries, but there is still scope for traditional distribution.
Fast forward three years. Where will the IT distribution business be in 2015?
We will be selling a technology and products that are completely different from what we have today. And selling it in a completely different way as well. Who could have earlier imagined a phone that streams movies and music? No one knows where the transformation will end, but we do know the future is here. And it will be a future that we can’t even imagine!