How COVID-19 and the lockdown impacted IT equipment sales in South Africa

This article was originally posted on MyBroadBand

The COVID-19 pandemic, the lockdown, and currency fluctuations had a big impact on computing and ICT equipment sales, but the outlook for the rest of the year is positive. This is feedback from two of South Africa’s largest technology distributors – Tarsus and Rectron – who were responding to questions from MyBroadband.

Tarsus Distribution chief commercial officer Gary Pickford said March was a challenging month because of the depreciation of the rand as global markets moved into the USD as a safe haven.

“The rand went from R15.66 on 29 February to R19.05 by 4 April. This caused a lot of panic-buying of technology equipment, especially when people realised that they needed to buy notebooks and printers to work effectively from home,” said Pickford.

April also posed challenges for Tarsus Distribution as they were only able to supply equipment to companies in possession of an essential services certificate.

“As we are a channel-focussed business, this meant that, other than sales to those customers who themselves supplied an essential service-approved organisation, very few transactions took place,” he said.

Since then, business picked up quickly as companies improved the digitisation of their businesses to support working from home.

Pickford said working from home became an overnight requirement for nearly every white-collar worker in South Africa and most students.

“As we were one of the first industries to have certain restrictions lifted, we were able to meet some of the pent-up need that had been created,” he said.

This has helped with the recovery of sales levels, which is a positive sign for the ICT industry.

Digital transformation stepped up

Rectron director Elaine Wang said the lockdown has accelerated the pace and necessity of digital transformation in South Africa across all types of businesses.

“As a result, we have seen an uptake in our work and learn-from-home solutions,” said Wang.

“Unsurprisingly, there has been an increase in the uptake of our Microsoft 365 six-month trial offer, which has helped people collaborate securely while working remotely during the lockdown period.”

She added that the lockdown has shown the importance of shifting business operations to the cloud.

“Our cloud and storage solutions have been able to cater to all organisations including consumers, small- and medium-sized businesses, corporates, and academic institutions,” Wang said.

The demand for personal computers and infrastructure to support working at home and schooling at home has also increased dramatically.

“We’re also seeing a trend in people preferring to order online, which has meant that we’ve seen good traction on our new Rectron Zone online ordering portal.”

Wang said they have seen changes in demand from various industries, with the lockdown affecting each industry differently.

Outlook for the rest of the year

Wang said Rectron anticipates that the trends they have seen will continue for the rest of the year.

“We are having ongoing conversations with our partners around providing solutions that address people’s immediate needs,” she said.

“That being said, with the recent round of load-shedding still fresh in our memories, we have seen people starting to invest again in our RCT power solutions range which is perfect for home appliances and personal computers.”

Pickford said they believe specific sectors such as retail, education, and businesses whose employees are working from home will continue to drive purchasing until the end of 2020 at least.

“The reason for this is that there are many users entering the market as first-time buyers of notebooks, printers, and other technology,” he said.

Pickford added that large corporates are evaluating a formal work-from-home “allowance” for their employees.

Such allowances could see a flurry of demand for commercial level notebooks and connectivity, with the required cybersecurity products and services which may boost sales in the commercial sector