ACC Distribution grows its Baltic business and invests in renewal

The consolidated revenue of ACC Distribution, one of the largest electronics wholesale groups in the Baltic States, grew by 5.6% in 2020 and exceeded EUR 255 million. In 2020, ACC Distribution Group earned a profit of EUR 5.2 million before interest, taxes, depreciation, and amortization, compared to EUR 2.4 million in 2019. Last year, the company managed to navigate the COVID-19 pandemic successfully: in the face of product shortages and increased market demand, its employees ensured a stable supply of electronic equipment, focused on company renewal and finding and developing new business directions.

According to Žymantas Baušys, Director of ACC Distribution, the company has completed its strategic exit from the Eastern markets in 2020 by selling the company that operated in Belarus. This has allowed the company to focus firmly on its home markets in the Baltics. The team’s focus, attention to partners, and consistent implementation of renewal as a strategic goal helped to grow revenues in the Baltics by 27% and increase market share. “We achieved the highest growth in our key IT product categories: tablets, laptops, monitors, and printers. We also increased our market share by three times in the small home appliances category, which has seen rapid changes driven by the demand for robot vacuum cleaners”, said Ž. Baušys.

We delivered on our promises

As one of the most successful projects last year, Ž. Baušys highlighted the company’s work with Xiaomi in the Baltic States. “In 2020, we planned to work actively with this brand, and we have done it: we have developed the brand and introduced new Xiaomi categories to the market: TVs, washing vacuum cleaners, and second-generation scooters. “When the lockdown started, and the market shifted to online, we were able to react quickly and increase sales to online customers. We also strengthened Xiaomi’s position in retail and expanded the brand’s sales channels. This has led to Xiaomi’s market share in units of wearables growing to 66% in 2020, the market share in units of robot vacuums cleaners to 32%, while the robotics category itself has doubled from 19.4 thousand units in 2019 to 41.3 thousand units in 2020,” said the ACC Distribution Director.

New business lines: “E. Mobility” and sports and leisure products

Last year, the company focused on finding and developing new business lines. “Working with new suppliers of electronic devices and IT solutions for business allowed us to generate almost EUR 22 million revenue, representing 8.6% of the Group’s total turnover. We also started to develop two completely new business lines: the electric vehicle business line “E. Mobility” and the sports and leisure products business. We expect these new activities to bring us an additional revenue of EUR 1 million by 2021,” said Ž. Baušys.

The CEO added that 2020 stood out because of many new business partners and strategic contracts. More than 22 new suppliers were onboarded, the most important of which were Huawei, Synology, Lexar, Sennheiser, and others. “Last year, our focus was on maintaining a high entrepreneurial DNA. We organized the “ACC Hackathon,” which generated many ideas that are already making a significant difference to our business. The COVID-19 pandemic has become a serious challenge for us, which the whole team has turned into new opportunities,” said the Director of ACC Distribution.

Growing demand for dropshipping and improving the shopping experience

“Last year saw an increase in dropshipping service demand. We have been shortening the supply chain with this service, and we have found that our customers find it very convenient not to have to keep the goods in their warehouses, and we can ship the goods to the buyers for them. We expect a 70% increase in demand for this service this year, which will allow companies selling electronic devices to reduce their transport costs”, said Mr Ž. Baušys. According to the CEO of ACC Distribution, 2020 will also focus on improving the customer shopping experience on the ACC Distribution platform. Investments have been made in IT tools, and platform updates have been introduced to help customers save time and make the platform even more user-friendly. A new warehouse management system implementation project was launched in 2021, with plans to make the delivery of services to all partners more efficient and seamless.

Sustainable growth and strong attention to employee wellbeing

Speaking about this year, the Director of ACC Distribution emphasized that the first half of the year has been successful, with the market and the company’s revenue growth, but the market is expected to slow down in the second half. However, it is likely that the revenues generated by the new initiatives will contribute to further sustained growth.

Last year, ACC Distribution had 245 employees across the entire ACC Distribution group, i.e., Lithuania, Latvia, and Estonia. “We are pleased that we had retained our employees in 2020 in a very uncertain environment when it was not entirely clear how we would manage in the face of a pandemic. Their focus and hard work have enabled us to overcome the challenges and take new market positions. We have invested heavily in internal communication so that employees are informed as often as possible about the company’s financial results and ongoing projects, giving them stability. We encouraged managers and teams to organize weekly remote meetings to discuss work and the wellbeing of employees. We used various tools to measure employees’ emotional state, invested in remote training sessions led by professional trainers for employees, and organized several remote events to allow people to interact in an informal setting”, Ž. Baušys shares insights on the focus on workers during a pandemic.