The past 12 months saw year-on-year growth of 6.7% in European distribution, says researcher CONTEXT. Sales accelerated quarter-on-quarter to reach 9.1% in Q4 2018, it says. However, growth will start to slow in Q2 2019 and will achieve 3-6% YOY growth thanks to OECD forecasts of reduced demand in EU economies and the impact of Brexit.
Although many distributors have been able to focus on organic growth during 2018, market consolidation is happening and could increase in 2019. Italy grew more than any other European region in 2018 and it is hoped that its performance will be similar this year. Germany closed 2018 with a solid +3.8% panel revenue growth and we expect IT distribution to grow by the same amount in 2019. However, although the UK recorded an impressive 8.7% year-on-year growth last year, Brexit could reduce that figure for 2019.
“Brexit is making any accurate predictions about UK performance extremely difficult, although all European markets are likely to continue with positive channel growth this year, even if some — like France, Spain and the UK — don’t quite match their strong 2018 numbers,” said Nick Westcott, UK & Ireland Country Manager at CONTEXT. “However, for those distributors ambitious and agile enough to support their partners’ and customers’ digital transformation requirements, there are gains to be made in cloud, hyper-convergence, cybersecurity and solutions that deliver on the promise of the Fourth Industrial Revolution.”
However, digital transformation offers a great opportunity for the channel to drive growth and differentiation this year. Those that succeed will meet growing demand for secure solutions, hybrid cloud, and hyper-converged infrastructure whilst evolving their own value propositions to align with new consumption models. The Fourth Industrial Revolution will also bring continued growth opportunities in areas such as AI, IoT, 3D printing and autonomous vehicles (e-mobility).