Harris Technology has revealed plans to launch a Chinese division that will sell products directly to Australian consumers.
In an interview with Openbriefing.com, chief executive Garrison Huang said the company would be taking advantage of its traditional B2B model and relationships with Chinese manufacturers in order to set up the Chinese division.
Huang said the plan for 2018 was to focus on Harris Technology's e-commerce platform by employing a manufacturer-to-consumer (M2C) business model.
"Our local team will take care of the product support and warranties for the Australian consumers, so consumers can have peace of mind when shopping on our online stores. The other great benefit of this business model is that we don’t need to carry the stock because we will rely on manufacturers or distributors to warehouse and distribute," Huang said.
Harris Technology will start the Chinese operation by first reselling mobile accessories, before later expanding into products such as toys, apparel and others.
Huang stressed that the new manufacturer-to-consumer model would not compete with resellers that buy through its distribution arm, Anyware Corporation.
"The soon-to-be established China operation will not sell any IT-related products that Anyware is already carrying," Huang told CRN. "Anyware’s commitment to its reseller channel has not changed and we have no intention to go into competition on all Anyware’s brands or products with resellers."
Huang explained that since taking over the Harris Tech business, the company ensured the business was run independently to avoid competing with Anyware's resellers.
"In fact, [Harris Technology's] website has so far even avoided carrying some of the gaming products, such as gaming chairs from Anyware," he said.
Middle tiers
He said that the removal of a free GST for goods sold by overseas companies would not interfere with the company's M2C model.
"We will eliminate almost all the middle tiers during the process. The GST compliance policy may deter some smaller players in the marketplace, hence may help us to get established," Huang added.
On the arrival of Amazon.com to Australian shores, Huang said he did not see the e-commerce giant as a competitor but as an e-commerce platform. Harris Technology went even further saying it intended to make use of Amazon's platform.
"Since we don’t have any brick and mortar retail outlets, unlike many mass retailers, we welcome Amazon’s entry into Australia and see this being a strong catalyst for our e-commerce business. We intend to utilise the Amazon platform to assist our M2C business implementation.
"Amazon will not only raise the consumer use of e-retailing, which in Australia is still lower than in places like China, but it will ultimately drive more consumer traffic to Harris Technology which will have its store on the Amazon shopping portal," Huang said.
Financial results
For the half-year ending 31 December 2016 Harris Technology posted a total of $25.6 million in sales revenue. The result was 5.47 percent lower than the previous corresponding year, at $27.1 million. The online technology retailer posted a net loss of $2.9 million, representing a decrease in profit of 333.82 percent over the previous corresponding year.
Huang said that since acquiring Shoply, the company has been reviewing the business operations and expenses.
"Firstly, we had to get the business fundamentals right and ensure we don’t spend money aimlessly for the sake of growth. We removed two major building leases and cut down a significant amount of costs and relocated the previous Shoply businesses into Anyware," he said.
According to Huang, the $2.9 million loss was mainly due to intangibles impairment.
Harris Technology operates two main businesses, a distribution one and the e-commerce.
The online reseller is a result of a merger between Shoply with Anyware and Harris Technology. Harris Technology is a well-known brand with a 30 years history.
In 2015, Anyware acquired the business of Harris Technology from Officeworks. Harris Technology Group recently acquired audio, video and multimedia distributor Audion.
In December last year, Harris Technology partnered with Sydney-based infrastructure-as-a-service provider Hosted Network to offer cloud solutions for small-to-medium businesses.
Updated 9.08am 1 June with update from Garrison Huang to clarify any conflict issues between Harris Technology and Anyware resellers.
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