By Altjin Munkhbat

In landlocked Mongolia in the early 1990s, off-brand or secondhand electronics sold by private resellers were the only affordable option for many people when buying home appliances, mobile phones and personal computers.

The unreliable nature of the entrepreneurs that sold them made consumers apprehensive about paying a premium for electronics over the decades, until a computer and computer parts distributor, Sain International, entered the Mongolian electronics business.

With funding from the European Union, the EBRD has helped Sain International establish itself as a major competitor with a 20 per cent share of the Mongolian electronics market.

Peace of mind guaranteed

In the electronics market, ‘secondhand’ is a term frequently applied to privately refurbished or cosmetically renewed old devices that are being sold relatively cheaply.

Even in 2021, transactions of secondhand consumer electronics thrive in Mongolia, accounting for over 50 per cent of the entire market. And as the prices for these items are so low, it is often cheaper even to buy a ‘new’ secondhand computer or phone rather than have a broken one repaired.

“The prominence of these small private resellers offering cheap products has severely deteriorated people’s trust in the quality of electronics products. Even famous multinational brands would find relatively few consumers willing to pay a premium price for guarantees, post-sale service and repairs,” explains CEO of Sain International, which had been doing relatively well as a business despite this fierce competition, Amgalantuya Bayasgalan.

The situation changed in 2015, however, when other professional distributors entered the market and consumers were exposed to even more options for their electronics demands. Sain International was faced with declining sales year after year, so the company sought help from the EBRD.

Sain International was matched with a business consultant that helped it understand the value of marketing and customer retention. The company shifted its focus away from sales promotions, and towards better management and customer education.

Multimedia content providing useful tips, repair tutorials, and customer feedback led to new consumers who learned to appreciate officially licensed products from professional distributors.

The offer of both virtual and in-person assistance educated people on the functions of their new purchases fostered a loyal customer base which saw Sain International grow to be recognised as experts in the Mongolian consumer electronics sector.

Solving high employee turnover

Along with tackling the issue of customer communication, the EBRD’s Advice for Small Businesses programme worked with Sain International to resolve its unsustainable employee turnover rate. Employees left after gaining only basic customer care and sales experience as they did not see potential for growth within the company. The challenge lay in the company’s strict top-down management style, the consultant found.

“Throughout the programme, I realised that I had been an intense micromanager. With the support of the advisory project, I have learned to trust the middle management staff to function competently on their own. Although giving fewer instructions and receiving fewer requests has been a strange experience, it has resulted in empowered and far less stressed employees. Additionally, I could spend more time thinking about the company’s strategic direction and decision-making,” says Amgalantuya.

Embracing the digital future

Now with stable growth in sales, empowered employees and a management more focused on strategic planning, Sain International was one of the Mongolian businesses better prepared for the global pandemic. Today, the company’s online sales channels are well staffed, equipped and managed.

“With a 20 per cent market share, we are ranked the 4th largest distributor in Mongolia. Although we still face new challenges, we believe that we are in a good position for further growth thanks to the advisory support we received from the EBRD. So far, our annual revenue has increased by 30 per cent!” says Amgalantuya. Even for a relatively established business like Sain International, the EBRD’s Advice for Small Businesses programme has proved an essential boost to the sustainability of their operations. The EBRD and the European Union believe in empowering SMEs and supporting their development