Synnex's trans-Tasman jaunt
- 13 December, 2004 22:00
Synnex Australia has announced plans to expand into the New Zealand market.
Managing director, Frank Sheu, said the distributor's Australian business had grown to the point where it felt comfortable expanding across the Tasman.
"Synnex Australia has grown 1000 per cent in revenue from when we first launched in Australia [seven years ago]," he said. "We have also grown from 300 dealers buying from us every month to more than 3000 and the product range is ten times as large."
To facilitate its Kiwi venture, the distributor would either acquire a company already operating in New Zealand or develop a joint venture model, Sheu said.
"Our preference is not to start a greenfield business because maintaining a management talent pool is always a constant challenge for us as a high growth company," he said. "Acquiring the local management talent is the real motivation."
The New Zealand market itself had a number of attributes which made a move attractive, Sheu said.
"Economically, New Zealand is progressing quite well, so we are under pressure from our vendors to move very quickly," he said.
The structure of the distribution market also favoured entry by Synnex, Sheu said.
"The other leading distributors put together are probably only half the size of Tech Pacific NZ, so it is a very top heavy and not very competitive market," he said.
Commenting on the recent Tech Pacific and Ingram Micro merger, Sheu said Synnex had planned its New Zealand move well before the news broke. And he didn't expect the two joining forces to have a big effect on the market.
"Tech Pac NZ is already quite big, but Ingram is quite small so it won't change the market much," he said. "Tech Pac NZ holds about 35 per cent market share and Ingram about five."
Where Ingram was broad-based, Synnex would be more selective about vendor relationships and focus on customer service, Sheu said.
"We are more involved with the whitebox market in the SOHO and SMB space, so we will all have room to play," he said.