“Asia is not a homogenous market”

ECN Asia spoke to Harriet Green, CEO of Premier Farnell, regarding the factors influencing the electronic product distribution in Asia. Excerpts:

Farnell places itself as a high-service, low-volume distributor. What are the advantages of this?

There are really only four high-service major distributors today, including Premier Farnell. Together, our share is just 10 percent of the $68 billion high service, small quantity distribution market. We have plenty of room to grow and support our customers. Premier Farnell provides high levels of service – 99 percent of what we sell to customers we send the same day or the next morning.

How would you describe the current state of electronic product distribution in Asia compared to other regions? What are the challenges here?

Generally, North America tends to be more homogenous. On the other hand, each of the markets in Asia is different. The way that people in China deal and work is different to that in Korea, different to that in Taiwan, Singapore, Malaysia, or Indonesia. I think the first challenge is that Asia is not a homogenous market. Each market is very different in culture, customs, and way of doing business. But I think the amount of free movement in Asia – the fluidity between the regions – breaks down some of those challenges and barriers. Another challenge is the rate of manufacturing coming into markets such as China, Vietnam, and Cambodia. There is a great deal of manufacturing that needs to be done, but the positive thing about it is the tremendous amount of engineering design creation that is also being gathered in the region. I would say another challenge is the war for talent. It is hard to get talented individuals who have experience and can manage or lead this entire change.

What are your immediate plans for Asia?

Within the whole of Asia-Pacific, the plans include investing a lot more people to strengthen the teams. We aim to employ close to 500 people in the whole of Asia-Pacific compared to about 380 people today. We will also continue to support our customers through important environmental regulations. We will expand the range of products we are offering to our customers here in Asia from three locations: Singapore, Shanghai, and Hong Kong. We are building our technical centers in India and China to support all engineers’ needs. We’re also looking forward on making Singapore a center for our Asia-Pacific supply chain. Singapore is a good location to support India – where we recently bought Hynetic Electronics Pvt Ltd to grow our business – as well as China, Malaysia, Thailand, etc. Other advantages of Singapore include a good airport, logistics, English language proficiency, good people, and great work ethics. What can I say? I sound like an advertisement.

Don’t you have a presence in India before acquiring Hynetic?

We only had distribution, now we are establishing our own presence in India. We have nine cities covered in India so we actually have the widest coverage. It’s a strong ground from which we are to grow through our acquisition.

There are so many small distributors in China which take a large portion of the global distributors’ revenue pie. Do you see this changing in the future?

We are already seeing it changing for four reasons. Firstly, Chinese engineers want a wide range of the very best products in the world. They want to be able to go to a distributor that has all the major vendors. Our top selling lines in China for engineers are the same as the top selling lines in America or the UK. Secondly, Chinese customers want to be guaranteed that their products are franchised with high quality. Thirdly, the local government wants Chinese engineers to have Web access to all the best information. Fourthly, the customers in China are not operating in just one city; they are doing one design in Xian, one in Beijing, and some work in Wuhan, so they need a distributor that is covering the whole country. Also, customers want to get their ordered products fast. I do not think that the small distributors in one province can provide all the products or the information, or the franchises, the Web, or the quality that the customers in China are demanding – but global distributors like us are able to do these.

People are saying that paper catalogs will soon become obsolete and everything will take place online. What are your thoughts on this? How’s your Web-channel approach?

I think that increasingly the younger people entering the workplace want to do more and more transactions on the Web. They can work as a community, share, and search. The Web is very powerful tool for them. If they can do everything by the Web, they will do so. We have invested hugely in our infrastructure, the speed, the processing power, and the search capability of our Websites around the globe. The Web is a huge part of our service to the engineers.



With the increasing number of suppliers and products that we carry, you just can’t get all the information from the catalog. You have to go to the Web to check out the new products that are coming. We may print the catalog once a year, but new products from customers are coming in every day. Customers usually browse the catalog and visit our Website for the complete product range. So the catalog is a supplementary helper to many of our customers, but it is no longer the dominant channel. We are not a catalog distributor. We are a multi-channel distributor, with great emphasis on the Web. We even take our actual catalogs and put them on the Web so users can print them. Our job is to provide multiple ways of servicing the customers’ needs. We have very large contact centers were people can speak to people. We also have field sales people who are out there visiting customers.

Have the ROHS regulations caused you any grief? What steps have you done to help customers?

We consider it a part of our service offer to transition our customers successfully to the ROHS legislations. Firstly, we offer information on our Websites and catalogs about compliant and non-compliant products. Secondly, we are stocking all the compliant products in segregated bins so that customers are absolutely getting the compliant products. In China, 94 percent of all the products that we have sold are ROHS-compliant. We have been a leader in assisting customers. What are the challenges left? Many countries have brought in the regulations and now the manufacturing is beginning. We need to make sure that our compliance processes are effective. ROHS is just the beginning of a hundred of other regulatory issues to affect lighting emissions, reduction of chemicals, etc. With so many regulations, engineers need to design with that in view. Providing the information, the stock, and the transitioning capability is what we have done in most countries around the globe, not just here in Asia.