AFTER expanding to 12 other countries – 10 in Asia, plus the US and Australia – electronic and LED distributor Supreme Components now has its sights set on Europe.
It hopes to open an office in the continent in the next two years, with its top choices there being Germany and the UK, president and chief executive officer Vick Aggarwala told The Business Times.
“Germany is the largest available market for semiconductors and electronic components in Europe,” he said.
And while the UK may not rank within the region’s top three markets, he likes that its business culture is closer to Singapore’s, compared to other European countries.
To make progress on this goal, the company’s representatives flew to Munich in mid-November to attend Electronica, the world’s largest trade fair for electronics.
They were there not just to evaluate the European market, said Aggarwala, but also to look out for the “right person” to help the company make connections within Europe – a “top guy who has experience (and) is well-connected with the European market”.
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A “key man” in each market
This person-focused strategy was what enabled Supreme Components to gain a foothold in South Korea and Japan, he added.
Supreme Components successfully broke into the Japan market only after it recruited a key local broker from one of the country’s top distributors. Similarly, it found success in South Korea only after sending over an employee who was familiar with the market to build up the business.
For Japan in particular, it would otherwise have been almost impossible to penetrate the market, said Aggarwala, as deals are sealed only after building close ties and trust with customers.
“You have to have a local person who understands the culture and customs,” he said.
Having a local presence in Japan enabled the company to engage customers it previously could not. For instance, Supreme Components now has accounts with big Japanese brands such as Anritsu and Panasonic, and is currently in talks with Hitachi.
It has been five years since Supreme Components set up its representative office there. In FY2023, revenue from Japan stood at 12 per cent of total revenue.
This year, the company went a step further by locally incorporating the Japan business as Supreme International Logistics Japan KK.
This has enabled the company to buy products in Japanese yen and export them wherever needed. “We think it’s a huge win for us, because the Japanese yen today is very weak,” he said.
Aggarwala continues to be optimistic on Japan. “Lots of investments are taking place in semiconductors in Japan,” he said, noting that chip giant TSMC opened its first plant there earlier this year.
Emerging opportunities
Expanding to Europe was one of four goals he laid out in a 2021 interview with BT, when Supreme Components won the Enterprise 50 Award for the seventh time.
He achieved two other goals earlier this year: expanding to China, and ranking among industry network Supply Chain Connect’s list of the world’s top 50 distributors of electronic components.
The last remaining target is for the company to hit S$100 million in revenue. On this, Aggarwala said: “We are definitely on track and tracking more than halfway through our goal, and we do hope that we’re going to achieve that.”
One way to grow revenue is to gain more customers which use Supreme Components for contract manufacturing services. The company provides this service by working with its own contract manufacturers.
Another is to expand the portfolio of products that it can provide, especially from “tier 1” suppliers – those that are most important to large companies.
Lastly, the company wants to provide solutions for companies which are looking to diversify their supply chains.
Aggarwala believes demand for such services will grow, with tariff hikes on the horizon when Donald Trump takes office as US president for a second time.
For instance, if a company wants to change the source country for certain components it is using, Supreme Components provides a replacement by offering an alternative from its existing franchise lines.
But just as with geographical expansion, in order to make this all work, Supreme Component’s top priority is finding “relevant and experienced” people that can drive these plans. Top of Aggarwala’s to-do list is to strengthen the company’s sales and product management teams.
“It’s all about the people. It’s the people that can make it or break it,” he said.
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