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Posted by Tirthankar Sen on November 24, 2013
I was recently invited to speak at the three-day Distree Asia Pacific event on technology and business model disruptions and their impact on tech distribution, where I spoke with tech vendors, consumer electronics (CE) giants, tech distributors, retailers, and e-tailers from across Asia Pacific. We discussed various topics, including the channel scenario for the coming two to five years. Based on these inputs and my understanding, I believe that the traditional IT channel, including consumer-focused distributors, will soon disappear unless its current business model changes. Here’s why:
With the onslaught of online and large organized retail stores, many mom-and-pop stores are likely to close up shop in the next two to three years; tier 1 cities will see the impact first. Distributors that depend heavily on this business model will see an immediate impact on their sales. The swelling ranks of middle-class consumers in Asia Pacific can act as a fantastic growth driver for the region. But not only do they now have more money, they are also well-educated, aware of the choices available, price-sensitive, and looking for a great shopping experience. All of these changes will continue to drive the already margin-deprived traditional channel ecosystem toward extinction in the age of the customer.
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