Tech supply chain player Redington on digital pivot to ride cloud wave

Redington, which supplies Apple iPhones as well as other electronic devices and software in India and other key markets, has been implementing a “pivot” that would rearrange its business channels dependent on brick-and mortar formats to digital streams.

“We will shift 10% of overall business through the cloud platform and close to 50% on the e-commerce platform – with a much different profit profile. It would be a game changer for us,” said Rajiv Srivastava, managing director, Redington, in an interview.

Srivastava, a former HP veteran who had also helmed the (IEX), said the pivot ties in with the large digital transformation movement afoot nationally, be it Aadhaar or Unified Payments Interface (UPI), where companies have helped lay the ‘digital rails’ upon which applications and interfaces, like payment apps, have been built for consumers.

Redington recently launched an e-commerce website where its partners sell their wares.

Separately, it runs a cloud platform for companies looking to migrate to modern platforms for their business operations.

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According to a company earnings transcript, Redington is keen on facilitating the adoption of 5G, augmented and virtual reality concepts, artificial intelligence, and others.

There has been a shift in consumers and businesses going for capex-light models in tech investments, evidenced in the rapid growth of Software-as-a-Service (SaaS) products that Redington distributes.

In FY22, Redington recorded revenues of Rs 62,732 crore with a 69% jump in net profit.

With operations in India, West Asia, Africa, and Turkey and over 290 brands in its stable, Redington believes a faster tech adoption by businesses, although with a focus on light-expense procurement models, would be the way to expand.

Srivastava told ET that the company’s cloud platform Cloudquarks allows businesses to configure their cloud models, buy and provision resources to complete their cloud adoption.

The company’s fourth quarter earnings transcripts recorded Srivastava as saying that cloud businesses – including products and services – grew 41% last fiscal year, much higher than overall business growth.

Redington’s growing partnerships with tech giants such as Amazon, Microsoft and Google, which have their own cloud suites and products, and the changing buyer preference towards leaner subscription models and tight focus on costs would augur well for the company in the long run.