Independent distributors implement strict quality control, equipment and process offer solid guarantee
The advantages of international large distributors lie in their wide product lines, strong supply ability, powerful capital strength and longtime reputation. In addition, profound understanding of the market and high demand of the internal operation efficiency are the critical factors of their successful entry. Last year, Arrow introduced such product lines as Atmel, Cree and Honeywell etc., Avnet signed with Marvell, Brodcom and Takson, Nuhorizons company expands the product lines in a large-scale which added powerful motivation of sustainably expanding its new market; concerns on secondary and tertiary brands and other specified markets are the resources of their interest increase. Meanwhile, Richardson upgraded its CRM system to strengthen the business operation mode of requirement creation/engineering scheme, and started the global supply chain to reorganize and strengthen the JIT service ability; Arrow upgraded its IT system to optimize such business process as VMI; and Avnet started the on-line B2B sales mode to provide rapid small-scaled procurement service. All of these measures meet well the new demands of modern market.
In the chart of “Most preferred Regional Distributor”, there are usually Yosun, WPG, Zenitron, Excelpoint and Cytech. They also possess advantages of capital and product line equivalent to those of some mainland distributors and advantages of cultural understanding and focuses superior to those of some international distributors. Despite all of these, they keep focusing on some hot markets and developing some niche markets. The survey data show that Taiwan distributors distribute a large number of human resources in mainland, indicating that they spend much energy on China market. At the same time, they have achieved pretty good sales achievements, WPG and Yosun are respectively listed in the first place and the fourth place among the distributors in China Mainland Sales Volume Chart.
Hong Kong distributors seem to focus on technological capability, with Willas, Weikeng, Excelpoint and Cytech as representatives, centering on “requirement creation” and providing one-stop solution scheme; YEL Electronics successfully converting from passive field into active field, expanding the width and depth of the services provided for customers. In addition, distributors from Hong Kong and Taiwan are more active than international distributors in expanding their agency in Chinese IC brand. For example, in last year, WPG took the agency of Zhuhai Actions and Cytech took the agency of Shanghai Apexone.
Another two companies first listed in the Chart are Wai Tat and S.A.S Dragon of Hong Kong. The former runs mainly radiofrequency and microwave components, with Synergy, Hittite and Zetex as its main brands, and the steady demand increase in telecommunication field brings Wai Tat a growth opportunity, on the other hand, the action that the S.A.S Dragon Group combined Hi-level, the biggest China agent__Sunplus and established LCM Manufacturer__Kitronix last year is the first step to widen its product lines and improve the layout of its industry chain, the sales income of which in the mainland market has reached over 2 billion Hong Kong dollars. Both the two companies target at the coming new chance of 3G, planning to provide service support on software development from component supply to platform scheme, mode production and specific application etc..
Flexible services, full understanding of the demands of local customers and focus on some particular fields are the main reasons why mainland distributors are greatly appreciated by manufacturers. In this year’s “Most Preferred Mainland Distributor”, Asiancom, China (Shenzhen) Electronic Appliance Corporation, Baite Electronics, Secom Telecom, Polar, Cogo Telecom, Honestar and Linpo are listed in the chart again as they did last year.
In the previous year, on the one hand, they actively introduced more authorized product lines to solidify their current fields or develop new markets, what’s worth mentioning is that they behaved more actively in introducing authorization of local IC brand. For example, Honestar took the agency right of Hair Integrated Circuit;Linpo, the Anyka; Cogo Telecom, the Shanghai Mountain View and Shanghai Jade; and Baite, the Vimicro; what’s more, 2/3 of the local distributors expressed the strong will to add their agency rights of China native brand IC. On the other hand, they actively adjusted their organization framework and improve their IT system platforms to constantly optimize the operation process and strengthen their operation and management. For example, Secom Telecom started OA System and CRM System, China (Shenzhen) Electronic Appliance Corporation implemented the SAP R/3 System.
Companies newly listed in the chart include Liyuan Group and Techtronics. Liyuan Group was listed in the chart of “Most Concern-worthy Growing Distributors” last year, and was successfully “promoted” this year, involving into China native feature service and the more than 15 years’ experience of China distribution and network and bringing Liyuan Group to a new highpoint. However, Techtronics, the China native agent of Samsung storage devices, is not a new face, the comprehensive strength of which such as steady supply ability is always favored and appreciated.
The honor of “Most Concern-worthy Growing Distributor”is won by MornSun Electronics, China National Electronic Devices Corp., Burnon Tech, Alltek Tech, Goldenchip, Aeco Electronics, Cestar and Aeneas Electronics. These companies keep the entry code of last year, that is, a certain-scaled turnover and strong increase potential. Though they have a not too high turnover, they are highly thought of and widely accepted in their limited customers and therefore become the fresh activists of the future. Focusing on development is their motto, with Cestar, Goldenchip, MornSun Electronics and Aeneas Electronics as representative distributors and expert-like distributors in power products and application solution.
As we expected in last year, some of the distributors listed in the chart last year have successfully entered into the list of more powerful “Mainland Distributors” or “Independent Distributors” this year. Therefore, four companies are listed in the chart for the first time: China National Electronic Devices Corp., Burnon, Alltek and Aeco. The common characteristics of the four companies are advanced technology and strong design ability, focusing on particular application fields or providing sufficient technology scheme and supporting services. For example, China National Electronic Devices Corp., relying on years’ experience in GPS field, provides all services for customers in such application fields as vehicle monitoring, vehicle navigation and mobile phone; Alltek, giving priority to telecommunication field, takes the agency right of Bertong Electronics, reinforcing its strength in such fields as cable TV broadband, wireless telecommunication and optical communication.
Based on different management mode and market positioning, independent distributors provide cervices greatly different from those of authorized distributors. Services provided by independent distributors are mainly matching procurement, especially supplies of rare/off-production devices. But the current market is occupied by more and more fake commodities, and quality is becoming the focus of excellent independent distributors.
In this year’s chart of “Most Preferred Independent Distributor”, the ratio of overseas distributors and native distributors is 3 to 7, showing that the native distributors are improving in strength and are accepted by more manufacturers, compared to the ratio of half to half in last year. Stack, Advanced MP and Smith & Associates are still superior in globalized operation network and capital strength, however, the native independent distributors such as Chitron, Interine, Pioneer, Mission and WX Electronics are making no efforts to develop such businesses as authorized brand, supplies in small amount and helping customers to handle excess inventories to improve their value connotations. Companies newly listed in the “Most Preferred Independent Distributor” also include Shenzhen Penglida and Northelec which won the honor of “Most Concern-worthy Growing Distributor” last year.
Under the pressure of fake commodities and fierce competition, in the past year, independent distributors give much more priority and human and material resources to guarantee product quality. Different from the practices of strictly auditing suppliers and training inspectors’ ability to distinguish fake commodities, independent distributors began to rely on the third party detection institute or quality system authentication such as ISO to guarantee the product quality. For example, Mission established a quality department, Chitron started ISO9000 Program, Pioneer participated in investing on the Electronic Components Detection Lab authenticated by the state, and Smith& Associates passed ISO9001:14000 Authentication etc.. All the measures further indicate that independent distributors are becoming more and more mature.
ESM China reported on May 1st, 2008: Independent distributors implement strict quality control, equipment and process provide solid guarantee.