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Brazilian IT distributors see revenue drop in 2016

Brazilian technology distributors saw a 9 percent decline in revenue with a R$1billion ($322m) decrease in sales during 2016, according to a study released yesterday.

The research carried out by consulting firm IT Data on behalf of the Brazilian Association of Information Technology Distributors (Abradisti) suggests that the decline in sales was prompted by the exchange fluctuations of the US dollar in relation to the Brazilian real seen during much of last year.

According to the study, distributors in Brazil were mostly affected by the decrease in PC sales seen last year, as desktops and notebooks represent 10 percent of distributors’ revenue.

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Other products have also seen a sales decrease during 2016, such as memory chips, processors and graphics cards, which have accounted for 12.6 percent of the entire revenue for distributors last year, down from 15 percent recorded in 2015.

However, the sales decrease in IT equipment and therefore in business for distributors prompted companies to seek other revenue streams, within products related to the technology market, such as lamps and security cameras. This particular category, labeled as “non-IT” accounted for 20 percent of sales in 2016 compared to 17 percent in the prior year.

Reductions in staff within IT distributors was one of the main consequences of the market developments seen in 2016, with 13.4 percent of the sector workforce being made redundant last year. IT distributors in Brazil currently employ 5.800 people – by comparison, it used to employ 9.150 staff.

During 2016, sector companies generated R$ 10,5bn ($339m) in business. For 2017, Abradisti predicts the figure will go up to R$11bn ($355m).

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