ADATA Technology, one of the world’s largest vendors of DRAM Modules and USB Flash Drives, has now ventured towards providing Mobile Accessories and LED lighting segment in India. Driven by its globally established product quality, it is now moving ahead towards profitability and paving way for prosperity of its channel partner ecosystem.
Richard Tan, Managing Director, ADATA Technology India speaks with Zia Askari from ChannelDrive.in about the company’s key focus areas and its future plans for India.
What are ADATA’s plans with regards to the Indian market at present? How stiff is the competition here?
ADATA over the years has been steadily increasing its footprint in the Indian IT market. Since the month of January this year – we have added mobile accessories as a product category. This product category has given ADATA a great push in multiple ways.
First and foremost, the revenue has jumped significantly, secondly since the product category connects directly with the end customers; the brand recognition has been manifold. Thirdly, we have slowly and steadily forayed in Telecom segment with some bundle offers to the end customers. Talking about the competition, what we can say is that since the mobile market is still growing in double digits, we have plenty of room to grow and with BIS coming into effect for a few categories, the consolidation is not far off which will further give a push in business northward for the established players.
What is the market size you are looking at to address and which are the target segments for you?
Market size cannot be put together in totality, as different product segment have different market dynamics. For example in DRAM modules, we have consistently been hovering between no 2 and 3 position. In SSDs which is still in its nascent stage we are strongly placed as no 2 for the last couple of quarters.
Instead of targeting the market size what we have been working for the last couple of quarters is to be more profitable than ever before. Besides we have also been working closely with partners on educating them on the new trends in storage segment and how to target each of them for a profitable business.
Any new initiatives that ADATA has at present for the Channel?
We have been consistently coming out with new initiatives for partners from time to time. Like for instance – we have been running loyalty program for partners working closely with us –wherein a lot additional support like additional margins, marketing support, promotional and demo offers etc. get offered to the partners.
What are the trends that are driving the memory market?
The renewed interest in DIY segment is giving a major thrust for the memory market. Besides that, the gaming PC segment is also getting a noticeable increase both in terms of revenue and numbers. With ecommerce being at the forefront, today even the DRAM or memories get easily sold from these portals which indeed is a good sign for growth.
What is your focus when we talk about the tier 2, 3 markets? How much of that market have you been able to tap?
For tier 2 and 3 markets, we have aligned our distributors and have been working with them to reach out. Since we have a widespread distribution network, we work out specific strategies, schemes, promotions with them for the areas concerned.
How was the last financial year 2014-2015 in terms of revenue and growth?
The growth for ADATA in the last fiscal has been phenomenal. Apart from adding new products ADATA ventured in one new business category i.e. mobile accessories with an initial focus on mobile chargers. Another business vertical that we ventured in was in LED lighting.
Talking in terms of revenue – we grew by around 40% over our last year figures. Talking about products mix – we spread our wings in SSD and External HDDs and today we can proudly say we are amongst the top 5 in both the categories.
Keeping pace with the changing business scenario wherein ecommerce is taking lead in the business – we have forayed in this segment as well and have been maintaining a balance with channel partners with some exclusive products for ecommerce thus avoiding any conflict.
What are your future plans and what kind of growth you are looking for during this financial year of 2015-2016?
To talk about future, we will need to go back to the last couple of years of ADATA operations in India. ADATA has been present in India since last more than 7 years. The first couple of years were through our esteemed distributors. But since last 2011, we have made our presence directly through our own setup.
In year 2013 we went one step ahead and have invested in our own infrastructure setup. In the end of 2013 itself – we added LED lighting category to our existing product line. In terms of growth, we have been observing a steady growth of around 30 to 40 percent year-on-year.
Talking about our growth plan, today we are amongst the few storage companies who can boast of having an entire range of products in storage segment including USB flash drives, External HDDs, complete range of SSDs and mobile accessories. We have been steadily working towards strengthening our position on SSDs and External HDDs.
In SSDs we have made excellent inroads and have bagged some key strategic accounts in the last couple of quarters. Our vision is to further strengthen our position in SSD in the coming quarters. As far as LED light segment goes, we have so far done the basics right by appointing the key distributor partners in most the major geographies.
What is your Channel Strategy and what role do they play in ADATA’s growth?
Channels are the backbone for ADATA India and we have been consistently working to enhance our relationship with the partners. Right from our early days till today we have been enrolling new partners and today we can easily boast of having more than 2000+ partners on board for our entire range of products.
Around 65 to 70 percent of ADATA India business is through channel partners. To keep our partners abreast of changing business dynamics and scenario especially in the SSDs, we provide them with required skill sets to be able to meet customers demand.
For partners doing consistent business with us – we have also been running a loyalty program wherein apart from the usual back-end incentive, we provide them with additional marketing and sales support, product orientation and training, demo units at discounted rates etc. Our sales team work closely with the partners on sales enquiries and help them grow their business. In a way – channels are an integral part of ADATA business ecosystem.
What are the upcoming trends we can expect in Mobile Storage Solution?
The trend in storage is two-fold – one on increasing storage capacity and the other on higher speed. Today the minimum storage capacities hover around 8GB in UFDs and Cards, 1TB in External storage, 128GB in SSDs and so on.
In terms of speed USB 3.0 which is already the de-facto in External Storage is now slowly but steadily also gaining momentum in pen drives as well. In fact this quarter we did extensive marketing on USB 3.0 in pen drives and that has given us excellent results. USB 3.1 is another landmark technology that is scheduled to be introduced by 3rd quarter – which is again going to be a game changer for storage vendors all across.
How are these changes going to affect the storage business?
All of these changes are definitely going to be a positive trend for storage segment as this will give us more business opportunities. Secondly today IT hardware segment is fast becoming a commodity segment wherein there is severe competition amongst the channel partners, e-tailers, Large format Retail (LFRs). This could in a way be a dampener as because of the fierce competition, revenues could be hit.
What are some of the points where Adata products score over the competing forces in India as well as globally?
ADATA as a brand has been investing its resources in R&D, product development, development of supporting applications, product certifications etc. These steps taken help us churn out quality products with minimal product failure.
How do you keep your business focused? Any suggestions for entrepreneurs who are experiencing challenging times?
A partner needs to keep an eye on changing business scenario and needs to adapt accordingly to stay relevant in the business. Like for instance, today partners focusing on storage can also look in opportunities coming out in data centre solutions storage needs. Secondly the partners also need to work closely with vendors who will always help and guide them on changing business needs globally and adapt to it accordingly.
