Synnex (Thailand) Plc (SYNEX) distributes computers, peripherals, software, IT systems and computer consumables of more than 50 global brands to a nationwide customer base of 5,000 retailers and wholesalers, locally branded computer manufacturers, department stores, superstores and stationery shops.President and CEO Supant Mongkolsuthree discusses the company’s strategy and outlook.
Please explain Synnex’s business model.
Synnex (Thailand) is a distributor of IT brands in Thailand covering both hardware and software categories and approximately 50 brands. For hardware,we distribute on behalf of Intel, Seagate,Western Digital, Asus, and others. For notebooks, we handle Asus, Samsung,Toshiba, HP, and, as of this month, Dell.For mobile phones, we distribute HTC,Acer and Dell; and for software, we are authorised to handle Microsoft, Adobe,and others.
How does Synnex manage its inventory?
We process on average 2,000 invoices,or 70-130 million baht in value, per day.We are very focused on improving our inventory management and operating expenses, as a percentage of sales, have improved each year from 4-5% a few years ago to 3.3% in 2010. Our target for this year is 3%. We have been successful because of our service. If our customers order goods in the morning, they will receive their orders in the afternoon of the same day, while afternoon orders are delivered the next morning. We are close to 100% on this delivery promise we’ve made to our customers.
On the products we distribute, we use the “Synnex (Thailand)” brand label to build and enhance customers’ faith and trust in the products. We are able to achieve effective and efficient inventory management because we have invested a lot in the infrastructure with automation systems throughout the warehouse.Because of the company’s joint venture with Taiwan’s Synnex Group, one of the best distributors in the world, we are able to leverage its know-how and excel. Synnex Group in Taiwan is a large global organisation with total group revenues at US$45 billion. Synnex (Thailand) is currently achieving 15 billion baht and we hope to grow to 20 billion this year.
Why would a vendor choose to distribute through Synnex?
the local ICT market, we have established a large position and are widely recognised among vendors. In addition,they realise our global connections through Synnex Group and our 22 years of experience in Thailand.
What trends does Synnex expect to see this year?
This year we expect business growth from the smartphone and tablet categories. Since the last quarter, we have been appointed by Acer to distribute its smartphones while we have become HTC and Dell distributors starting in this quarter and we expect to be awarded distributorship for another major smartphone brand soon. Also, with every major brand now releasing tablets, we expect huge growth in this market in Thailand this year and expect to distribute tablets for the same brands mentioned above. Now that smartphone prices start as low as 6,000 baht instead of 25,000 to 30,000 baht in the past, the affordability is expected to expand the market greatly.Besides, with the agriculture industry doing well in Thailand this year and last year, we saw and continue to expect the upcountry markets to grow faster than Bangkok.
What trends does Synnex expect to see this year?
This year we expect business growth from the smartphone and tablet categories. Since the last quarter, we have been appointed by Acer to distribute its smartphones while we have become HTC and Dell distributors starting in this quarter and we expect to be awarded distributorship for another major smartphone brand soon. Also, with every major brand now releasing tablets, we expect huge growth in this market in Thailand this year and expect to distribute tablets for the same brands mentioned above. Now that smartphone prices start as low as 6,000 baht instead of 25,000 to 30,000 baht in the past, the affordability is expected to expand the market greatly.Besides, with the agriculture industry doing well in Thailand this year and last year, we saw and continue to expect the upcountry markets to grow faster than Bangkok.
What are the biggest risks facing your business?
The biggest risk concerns politics.Political turmoil could slow our business and the ability to deliver promptly to customers. The appreciation of the baht has not been an issue because we are able to fix the rates with our customers.
Synnex does a lot of CSR work, can you provide an update?
We have provided computers and library software to a lot of schools nationwide under the “IT Library by Synnex” project. Our goal this year is to provide and install IT libraries for schools in need in the cities that have not been covered yet in order to reach the project’s goal of covering schools in every city in Thailand.
Where do you expect to see Synnex in five years from now?
In five years from now, we hope to triple the number of invoices we process per day to 6,000, distribute through our own retail outlets, and possibly expand further with our own brand name. Until then, we will continue to focus on acquiring more brands to distribute throughout our channels and focus on improving our operations further.
The Executive Q&A Series is presented by ShareInvestor, Asia’s leading financial internet media & technology company, and the largest investor relations network in the region with more than 400 listed clients.The interview is conducted by Pon Van Compernolle, vice-president of Merchant Partners. For more information, e-mail gancanapol@merchant.co.th or howard@shareinvestor.com or visit www.ThaiListedCompany.com
