—Shiv Bhambri, CEO, RS Components & Controls (India) Ltd
RS Components is the world’s largest distributor of electronics and maintenance products serving 1.8 million customers worldwide. With operations in 32 countries, it distributes 5.5 lakh products ranging from semiconductors and optoelectronic to power tools. RS closely work with top 2,500 brands.
Shiv Bhambri takes us through the company’s operations and expansion plans. He also explains that India is poised to see a growth in e-commerce even in the B2B segment. An interview by
Venugopal Pillai.
To start with, tell us about the broad range of electrical/electronic products that you deal in.
RS is the world’s largest distributor of electronics, electrical and maintenance products. We offer a choice of 500,000 products serving 1.8 million customers worldwide. Globally, we have 2,500 brand partners and have strategic alliance locally with brands such as Tyco Electronics, Fluke, Schneider, ABB, Phoenix, Honeywell, Tektronix, and many others.
We observe that while you deal with hundreds of brands across diverse product categories, you also have your own brands. Please explain this co-existence.
The RS branded product range provides our customers with a cost-effective alternative to manufacturer brands.
Since our inception in 1937, RS branded products have played a key role in our success. Combining the best product quality together with the best value for our customers, the range offers the opportunity to reduce costs without compromising performance.
The RS branded portfolio now comprises over 35,000 electronics and maintenance products, from transformers and passive components, to LED replacement lamps and bearings, to screen cleaner and power tools.
Tell us about how you go about the process of adding brands and products to your portfolio.
The selection of brand and products into the range depends upon the technology and the market penetration that the brand already has. We make sure that each brand has a well-defined role to play in each product-market context that it is expected to contribute.
We observe that most of the brands that you deal with are international. Do you deal with Indian brands?
As of now, we do not have any Indian brand directly in our portfolio. We may look forward to dealing with the Indian brands as well in the near future.
China is said to have invaded the electronics market with cost-effective (cheap) products. What is your view? Today all the leading brands have their manufacturing facilities in China, from where they are supplying to the rest of the world. The conducive policy environment in China either encouraging or directly funding investments in science and technology and infrastructure development favors China to become the manufacturing hub of the leading brands. Due to these economies of scale and hence low cost of production, products manufactured in China are certainly cost effective.
Do you deal in Chinese products?
Yes, we do have products in our range from the leading brands that are manufactured in China.
Tell us about your global reach. Which are the countries that you cater to?
RS has a strong base across the globe, with direct presence in 32 countries while in another 37 countries we work through distributors. Serving 1.6 million customers, from our 17 warehouses, we ship 46,000 parcels on the same day the orders are received.
What is the level of acceptance of “online shopping” in India vis-à-vis other countries?
E-commerce is the future! Globally RS does 54 per cent business online. E-commerce is rapidly picking up pace in India, but is limited to B2C sector. In B2B sector, the progress is a bit slow. People search for products online but still prefer to order offline.
In case of B2C transactions, the e-commerce market in India is predicted to rise from 3 per cent of consumption to 7 per cent by 2015. In spite of the trends, RS Components has been able to pave the way for B2B e-commerce in India. Today, the RS website offers the most simple, reliable and cost effective way to do the business.
Tell us more about your global warehouses and how to maintain an efficient supply chain.
We have moved from a local country approach to a global supply chain structure with an aim to increasing network optimisation, efficiency and improving engagement with our key suppliers across Europe.
We have 17 warehouses across the world – 2 in UK, 7 in EMEA, another 7 in APAC and 1 in North America. In addition to this, we have 12 planning centres and we ship around 44,000 parcels per working day. One parcel is shipped every two seconds and our availability of stock is greater than 96.3% in EMEA.
As we observe online shopping, at least with respect to consumer goods, is picking up in India. What is your view and experience? Online shopping market in India is growing quickly but much of its growth is expected in B2C transactions. E-Commerce in India is driven primarily by purchases related to travel, books, electronics, apparels and deals. The rest, a very small percentage, includes gifts, cakes, custom memorabilia, sweets and bakery items, artwork auction, baby care, movie ticket booking, airlines portals, movie rentals, sports, health, fitness, beauty, wellness, perfumes, groceries, vegetables and fruits. Ecommerce has started to appeal the upper- and the middle-class consumer. The market definitely is poised for a rapid growth.
Please discuss your growth and expansion plans in terms of adding products, brands, geographical reach, etc.
We are on double digit growth YoY and expect this to continue in FY14 also. RS has always been a leader in Maintenance. We are trying to establish the same leadership in Electronics. We added approx. 80K new products into our range last year. The latest introductions are mostly into the electronics range where we are trying to strengthen our portfolio to meet the ever growing needs of design engineers. We are getting engaged with the design engineers through our various technical marketing tools.
As part of our maintenance strategy, we are continuously strengthening our portfolio of Automation & Control products. We are also leveraging our global relationship which suppliers like Fluke, TE, Honeywell, Schneider, ABB etc.
Given that online shopping portals are gaining popularity, how do you gauge emerging competition?
With e-commerce business rising in India, many online shopping portals are gaining popularity but they are limited to B2C transactions. In spite of much growth coming from B2C sector, RS Component has been able to pave the way for B2B e-Commerce in India. Today, the RS website offers the most simple, reliable and cost effective way to do the business. It contains complete specifications and datasheets of all the products and is backed by a strong technical support team to handle customer’s technical queries, enabling prompt resolution of problems.
Our initiative has got enormous support from both existing and new customers who are enthused by the idea of being able to search through the entire catalogue at the click of the mouse. By nature, electronic design engineers are web savvy and use search engines to research a component or find the right distributor. They also use log on to manufacturers’ websites to compare products. Hence the initiative was a right step in the right direction.