Poland-based IT distributor ABC Data has announced an opening of its new distribution centre in Hungary that is expected to serve the clients both locally and across the Balkan states as the company wants to increase the number of customers from 13,000 currently to 20,000 by 2018 and continues expansion plans across the Central and Eastern European region.
It says the regional branch will also carry out the business development operations which would include the exploration of the business and market opportunities in new countries.
The news comes just a few days after ABC Data announced it was planning to boost its operations in the Romanian market following a deal extension with one of the regional logistics and supply chain providers DELAMODE Group. The new agreement does not only extend the existing cooperation between the two companies, but it will also expand it, it says. Under the terms of a new deal, DELAMODE will now serve the ABC’s Romanian branch, ABC Data SRL Romania, and will also provide its assistance and logistics services to help the company grow its exports operations to the neighbouring countries such as Bulgaria and the Balkan states where it expects to sign new contracts, it says.
“We are sure that our cooperation with the leading partner such as DELAMODE will help us drive up the satisfaction level among our clients in the region. And this is also very important to us as Bucharest has an excellent strategic location on the European map and therefore provides ABC Data with a right platform for further expansion into Bulgarian and Balkan markets,” says Piot Sedziak, Operations Director at ABC Data.
What is more, the company has already secured the contracts with some leading vendors in the region which include Asus, Lenovo, TP-link, Synology and Benq, it says.
However, the regional expansion comes at a cost. ABC Data has just announced a significant drop (43.4%) in its Q1 net profit and a further decrease in the revenue which went down by 23% counting year-on-year and by 30% quarter-on quarter. Although both figures were below the market expectations, the company says there is a reason for that and the results were in line with its own forecasts for Q1.
According to some analysts the disappointing results might partly reflect the conditions for the IT sector after the recent changes in the value-added tax (VAT) legislation in Poland. However, according to the company, the first quarter is not conclusive as far as its full-year results are concerned plus on top of this the comparison base for the same period last year was record high.
As for the ABC Data business strategy for the next two years, it is aiming high to become a leader of the IT equipment distribution segment in the Central and East European region which will be achieved through strengthening the company’s position in the countries in which it already established itself. At present, it says it is the third largest IT distributor in Romania and eighth in Hungary while in Lithuania and the Czech and Slovakian market it holds fourth and fifth position, respectively.
With a growing number of the active customers across Romania, Slovakia and Hungary, the company says it has significantly improved the sales in all three regions posting an 82%, 42% and 36%, respectively, increase. Ilona Weiss, the president of ABC Data, stresses that around 85% of sales currently comes through the company’s e-commerce platform. “The development of the e-commerce tools is our yet another priority outlined in the business strategy for 2016-2018 and we have been continuously investing in this field. At present, we are focusing on expansion of our existing platform and the e-commerce tools such as InterLink, Reseller Web and Gateway. What is more, we have also made investments in mobile platforms development as well as creating our own transactional platform dedicated to cloud-based solutions,” she adds.
As far as mobile telecommunications sector is concerned, ABC Data is aiming to become the leading equipment supplier for the telecoms in Poland where it presently holds a 60% market share and acts as the official distributor for Huawei, Apple and Samsung, one of the most popular mobile device brands in Poland.
The company’s product portfolio currently covers the IT equipment, consumer electronics, mobile tools as well as household appliances and toys among the others. ABC Data also runs channel programmes and offers a wide range of value-added services for its partners.