ASX-listed distributor, Cellnet (ASX: CLT), is planning to ship IT and telco products directly to Australian retailers from China after taking on the brand licences and Asian facilities of accessories vendor, Scala.
Managing director, Stephen Harrison, said Scala, which produces telco accessories and bags as well as a range of leather goods and non-IT products, had been looking to exit the telco business. Under the new agreement, Cellnet has taken over the lease of Scala’s China facility and its dozen China-based staff, and will pay royalties to the company on future product sales.
“We’ve worked with Scala for many years – the company had got to the point where they wanted to slow things down and just concentrate on the handbags and leather goods,” Harrison said. “We have licenced the Scala name for A/NZ but most importantly for us, have accessed their facility and distribution business in China.
“This will give us a good hub in China to consolidate a lot of our products and kit, such as packaging, and our shipments out of China. Currently, we have got orders coming in from everywhere across China.”
Products Cellnet accesses from China include IBM, Asus, Lenovo and Acer hardware. Harrison said its ultimate goal was to ship direct to Australian customers out of China.
“It’s not so much for SMBs or our smaller IT resellers but the mass retailers and tier one players,” he said. “By shipping directly in bulk to the customer we can save a lot of time and money.
“The biggest value for the Cellnet Group is to have a presence in China. It can also work both ways and allow us licence to sell back our telco products into that market.”
Although the China facility is designed to cut out some local warehousing and shipment steps, Harrison said there were no plans to downsize its Australian warehouses in the short-term.
“We will continue to have a lot of other products that we can’t do this with. We are growing the business, so we haven’t looked at the warehouse situation. We’re always looking at new vendors and products and I don’t see us reducing the warehouses,” he said.