The heyday of electronics distribution expansion was undoubtedly the 1990s, when top-tier players Arrow Electronics Inc. (NYSE: ARW), Avnet Inc. (NYSE: AVT), and VEBA made acquisitions that positioned them around the globe. North America-based Arrow and Avnet moved into Europe and Asia; Germany's VEBA moved into the US.
A second wave of expansion has been happening more slowly and with less fanfare in the past 10 years as companies round out their global presences. Distributors expand primarily in two ways: by greenfielding (opening offices in foreign locales); or by acquisition. Asia's World Peace Group, which has opened offices in North America; Future Electronics and TTI Inc. , which have expanded into Europe and Asia; and catalogue distributor Mouser Electronics Inc. are among those that use the greenfield approach.
Mouser, for example, opened six new offices in 2011 to bring its global total to 19. "We've opened offices in Sweden, the Netherlands, the Czech Republic, Taiwan, India, and Thailand in 2011," says Kevin Hess, vice president of technical marketing for Mouser. "Those are areas where we already have customers and see the greatest opportunity for growth."
Mouser focuses intensely on the design and engineering market. A classic catalogue distributor specializes in low-volume, high-mix orders for design, engineering, and prototyping. In theory, a catalogue can support a global customer base through a single mega-warehouse location staffed by sales and support personnel 24/7.
Mouser is taking a different approach. Each of its offices is staffed with sales and marketing staff and technical support. These staffers work in the same time zones, the same language, and in the same currency as their local customers. "We want to support our customers during the hours they are working," says Hess. "They don't have to figure out what time it is somewhere else so they can place an order before the close of the business day."
Mouser's Website also provides foreign language and foreign currency options, but the company feels strongly about having a local presence. "We feel that we should engage with our customers anywhere and at any time they need," says Hess. "Particularly when it comes to technical support."
Orders are managed through Mouser's central warehouse in Mansfield, Texas, which provides expedited delivery options. Since the company is committed to having new products on its shelves before the products are even announced, maintaining inventory carries some risk: Mouser sometimes announces three or four new products a day. "We realize that it is a value to our suppliers that we focus on and carry their new products," says Hess. "Maintaining good relationships with our suppliers means that sometimes inventory has to be moved around or returned. That's a risk we are willing to take."
The global aspect of electronics distribution is becoming increasingly complicated as foreign companies compete with indigenous distributors in all regions of the world. In the next few months, EBN will be looking at how the channel is shaping up in the globe's major electronics regions and how those profiles may change over the next 10 years.