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<strong>IT Europa</strong>:Poland's distributors start to feel the pinch

October 27, 2006

IT Europa:Poland's distributors start to feel the pinch

Poland remains a notoriously local market, with few foreign distributors having a noteable presence, except Actebis and Tech Data which are placed first and second in the country. But following EU accession in 2004, Polish distributors have been feeling on edge with the risk of more competitors entering the market, and they are specialising in an attempt to fortify themselves. IT Europa looks deeper...

Poland remains a notoriously local market, with few foreign distributors having a noteable presence, except Actebis and Tech Data which are placed first and second in the country. But following EU accession in 2004, Polish distributors have been feeling on edge with the risk of more competitors entering the market, and they are specialising in an attempt to fortify themselves. IT Europa looks deeper...

Of the ZL 17bn (€4.4bn) Polish IT market, 40pc of IT sales are to SMBs and consumers, and the market is growing rapidly - at almost 10pc annually, according to local researcher and publisher Teleinfo. The largest broadliner in the market, ABC Data, is owned by Germany based Actebis, with revenues said to be around the ZL 1.7bn (€432m) mark. It is trailed by some way by second-placed Tech Data, the US giant that has Polish revenues estimated at ZL 1.3bn (€329m) . Following this are local goliaths Action - which is expanding activities in Ukraine too - AB and Incom.


Tech Data’s growth in the market has been strong and the company claims Poland is one of its key countries. Irek Dabrowski, managing director at the firm’s Polish office, tells IT Europa: ‘Poland is one of our most profitable markets, and in general it’s a good time to be here. ’ Tech Data has for a number of years been attempting to restructure its business to return key zone EMEA to profitability.

Consumer electronics are quickly becoming a hot topic for Polish distributors, and are usually what they mean when they refer to ‘convergence’, rather than the coming together of telecoms and IT goods. But Tech Data claims to be ‘the only distributor genuinely covering both segments [IT and consumer electronics]’ and it is also growing its networking expertise. Other distributors have a mixed response to this, with Incom stating it also supplies the consumer resell arena with entertainment and photo products.


Retailers are increasingly leaning towards this convergence to sell PCs, as consumers develop more ‘disposable income’ and become interested in hightech consumer products. The introduction of Microsoft’s new XBox console to the market this autumn only serves to accentuate such a link, as many observers have noted the console’s similarity to a gaming PC, and many Polish resellers are said to be looking into this market to avoid multiple retailers stealing the limelight.


While elsewhere in Europe Tech Data tends to brand its high-margin networking business as Azlan, in Poland it has made a decision to sell this through the Tech Data brand. Dabrowski explains: ‘The Azlan name has never existed here and we felt it would be more effective to stick with the broadline name. But in the Czech Republic and other markets, Azlan is a known name so it’s very effective there.’ Despite running against the grain of nearly all of Tech Data’s markets with this decision, the firm is adamant that value-added, Azlantype distribution represents 20pc of its revenues in the country. ‘But it’s not a fast-growing area compared to broadline and retail sales ,’ Dabrowski is keen to point out. Other specialist distributors in the market include networking disti Techmex and storage and security firm Veracom.


Third-placed distributor Action is a major components-led distributor, but is said by some to have a certain reliance on large contracts. A source at another Polish distributor tells us: ‘Action counts a lot on the government, and it hoped for a deal with the Ministry of Education. Without these big deals, it is sometimes pushed to look elsewhere to make up the difference.’ Action has recently set out a plan to better its business by focusing on its in-house PC brands and its own retail operation, and increasing its investment in its Ukrainian office, as detailed in the last issue of IT Europa.

Copyright: IT Europa (27 November 2006)
www.iteuropa.com

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