Heart of our software engineering for the world sits in India: Logitech CEO

She talks about making Logitech the most loved brand and growing the India market

It has been just six months since Hanneke Faber took over the role of global chief executive officer of computer parts maker Logitech, and the firm’s Q4 results have already surprised the street. India is not a new market for Faber, who has worked with firms such as Unilever and Procter and Gamble, and has been part of brand-building efforts for products like Horlicks, Broke Bond and others in the country. In an interview with Shivani Shinde in Mumbai, Faber talks about making Logitech the most loved brand in India and rest of the world. Edited excerpts…

It has been six months since you took over Logitech, how has been the journey so far?

It has been really great for Logitech and also a great time for India. I'm excited about our fourth quarter results. For the first time in two years, we have reported growth. We grew 5 per cent in fourth quarter, and we also had a strong margin. Our gross margin was up more than 700 basis points and our operating income almost doubled vis-a-vis last year. A really strong result and good momentum going into the new financial year. So, now we need to deliver sustained growth.

There are a number of tailwinds in our business. First, of course, is hybrid work. Globally, more than half of office people now work hybrid, which means you need multiple sets of equipment, keyboards, mice, webcams, video conferencing equipment, etc.

One, in India, 46 per cent of office workers actually work hybrid, so, that trend is very much prevalent here as well. Two, the gaming market globally continues to grow very robustly. Everyone now plays… Gaming is also big in India. Finally, AI is a huge tailwind for us as well. There are early signs of an AI PC refresh, with all the big players launching their AI PCs. In our own business, we're leveraging AI in various ways that I think will be a tailwind.

How does AI fit in Logitech’s products?

In software engineering and areas like marketing and design, leveraging AI tools makes you do more than what one did before. We see ourselves as the interface to the large language models. The interface to ChatGPT, Copilot. For instance, we launched a month ago Logi AI Prompt Builder, which is a free software. It sits in every mouse and keyboard of Logitech. We already have a million unique use cases in a month. It's something that seems to be working and that makes our products better. We are using our own large data models in machine learning to make our products better, especially on the audio and video side. An example of this is our latest headsets — we've trained this huge data model to do two-way noise cancellation.

How big is India for Logitech?

We don't break up country numbers. India is growing robustly but it should be much bigger. My visit to India, which is for a week, is to discuss the plans the team has. There are a few dynamics at play here in India. The first one is that the penetration of PCs is still relatively low. India is where China was 20 years ago. However, it's not going to take India another 20 years to get to where China is today. So, we have to make sure that we're ready for faster PC penetration. The second point is about our premium products, especially the MX line. These are designed for advanced users such as people involved in developing software, financial analysts, etc. We are a Swiss company. India has more software engineers than the population of Switzerland. That just creates a huge opportunity for us. We are working on a strategy on penetrating these advanced users.

Any plans for localisation and manufacturing in India?

We have been looking at it seriously. So far we don't manufacture here. We manufacture in various other countries but we'll continue to look at that. India is a huge research and development hub for us. Over the last five-six years, we moved a lot of R&D here. We have about 450 engineers in Chennai, on top of our commercial teams, who drive the India business. These engineers work for India, but very much also for our global business. We believe talent here is really outstanding. This is a very important step in terms of investing in India.

The Chennai R&D team is more focused on software, but there are some designers there as well. For every single product of ours, software is key. It's not just a piece of hardware. The heart of our software engineering for the world sits in India.

What are the key challenges in trying to expand your market in India?

As I said, the biggest challenge is the low PC penetration. Many of our products are interfaces to PCs. But I am very optimistic about the scenario changing soon. Even as that changes, there is a large group of advanced users here — software engineers, creators, financial analysts and gamers — giving us a lot more room to win.

While PC penetration is low in India, smartphone users are huge in number. Is Logitech planning to cater to them?

Products that go beyond the PC are one of our innovation focus areas. AI Beyond the PC and sustainability are super important. I have to say over the years the smartphone segment has not been our strongest point but there are some things that we are excited about. We will share soon.

E-waste is a real concern. How does Logitech tackle this?

Sustainable design is a real thing for us. Almost two-thirds of our global products are made from recycled plastic. If you look at HUL or P&G, they talk about recycled plastic but they're in the 20 per cent range. Hence, to be two-thirds is really high. We're looking at various other ways to really design for sustainability, circularity. I am proud that Logitech is at the forefront of that.

What we see with our B2B customers around the world, including in India, is that they all have their own CO2 reduction target. They need their suppliers and we're there to help them achieve their target.

Your earlier stints were with majors such as Unilever and P&G. Is Logitech any different, or similar?

The major similarity is that these are business with real people. Consumers who use them. If there's one thing you learn at Unilever, it's really focus on the user. And many of those aspects are true here as well. The second piece is it's a business that's in the retail and online channel. We were at Croma and Reliance. We have big business at Amazon as well. Those are similar. The third thing that's similar is, of course, at Unilever there are great brands and building great brands is at the very heart of what Unilever does. I had the pleasure of working here on Horlicks and Brooke Bonds, and others. I would aspire to do the same for Logitech over the years.

What will be your key focus areas?

It's very important for us to remain very focused. We are a design-led, software-enabled hardware company. Our focus areas are work and play. Within that I see three huge opportunities for growth for us and this is true around the world.

First one is doubling down on B2B. Every business on the planet needs great video conferencing today because the way they're working is so different from pre-Covid days. Second, priority is leveraging geographic opportunities. We're in more than 100 countries. But the development of each country is different. This is why I'm in India this week, and we still have so much opportunities in India. This is one place where we want to grow faster. Finally, it is about building an iconic brand. Logitech is a global brand and we are well known. However, it's not truly a loved brand yet. It's not truly a brand that you really can't live without. That's what we are trying to build now.