European IT channel on track for record breaking year in 2021, claims analyst

Market analyst Context says European IT channel now on track to break first ever €100bn-revenue year in 2021, despite pandemic pressures

Mobile PCs and SMB reseller deals helped the European channel end 2020 with double-digit growth in revenues.

According to the latest figures from channel analyst firm Context, distribution sales in Q4 hit a record €26.3bn (£23.34bn) rising 10.2 per cent year on year.

With this momentum of "huge demand" across European distribution, the market analyst firm predicts 2021 will come close to being the first ever €100bn-revenue year for the IT channel in Europe.

"The figures are in keeping with a year in which the channel outperformed expectations every quarter, despite unprecedented supply chain challenges and the closure of many offices for much of 2020," the analyst house said.

Context's report added: "Mobile PCs played a huge role in this growth, particularly notebooks where volumes grew 37 per cent year-on-year in European distribution and revenues grew 31 per cent."

Full-year sales were up 7.2 per cent to €83.3bn, versus figures of €77.8bn and 3.6 per cent growth in 2019.

Size matters

Context says it was small and medium resellers (SMRs) that "dominated the channel" last year in Europe.

Their market share continued to hold at 36.5 per cent. Larger enterprise resellers, meanwhile, lost two per cent of their share over the period, settling at 26.4 per cent of the market in 2020.

Retail chain players and etail business outlets made up the remainder of the market.

Looking ahead

According to Context Global MD, Adam Simon, some big software and warranty deals in Q4 by enterprise resellers may initiate "a bounce back" in their fortunes looking ahead.

"The IT channel in Europe has ended 2020 by once again outperforming expectations — we have not seen double-digit growth in a quarter in recent years. With the current level of demand for digital products, there's more to come in 2021," he said.

"We expect growth to restart in the early part of January.

"Rather than start the year with an empty pipeline after the strong finish to 2020, we'll see the opposite.

"There's still huge demand that can't be satisfied due in part to supply shortages and this will continue to drive channel sales growth."