Profitability challenges


Gone are the days when the market was defined around a handful of product categories with the PC or the laptop as the centerpiece. PC shipments may be slowing or flattening out but overall Technology devices purchases are higher than ever. There is a profusion of devices available today that can grab the consumer’s attention. A growing range of wearables available in the market is ensuring a steady rise in penetration of these new generation devices with consumers. There is also room for growth in specialist Tech gear.

While there is no dearth of innovation, the supply chain is however grappling with shrinkage of profits and even several manufacturers may look at circumventing traditional channels to curb costs. A few smartphone brands have signed up exclusively to sell via online e-tail stores in the region. However, the e-tail stores themselves on the other hand seem to be battling profitability woes. From what I have heard, online shopping of technology products is growing but still quite marginal in the consumer segment. Offline purchases still will dominate for the foreseeable future ahead in the technology market.

As the hunger for owning the best technology devices is only growing in the consumer space, some of the demand continues to shift towards newer device categories. This has broadened the technology devices market further.

But then there is the conundrum – in markets where consumers are buying more technology devices and accessories, there is the still the challenge of profitability among most stakeholder segments in the supply chain, from vendors to distributors and offline and online retail. It perhaps boils down to the fact that with demand and purchases spread out across the multiplicity of brands and products that are available today, not many are able to attain the critical mass that they are looking for. This might be a challenge that the go to market strategies of companies need to account for.