Lenovo, the Chinese company, is trying to adopt in India the practices that led to its success in China, where it is the undisputed number one vendor of personal computers. And, in 2010-11, Lenovo India was the fastest growing vendor in the top five. Amar Babu, Lenovo India’s MD, talks about the strategy in an interview with Bibhu Ranjan Mishra. Edited excerpts:
You crossed the 10 per cent market share in the Indian PC market in the third quarter of 2010-11. What is going to be the forward strategy?
Worldwide, we follow a strategy called ‘protect and attack’. We try to protect our strengths, which are our China business and large enterprise business. We will attack opportunities. We were never a big consumer player outside of China. The big opportunity was to drive the transaction business model in the emerging markets, with focus on the consumer business and SMB (small and medium business).
In India, your traditional strength had been the enterprise segment. In SMB, you still have a long way to go.
It’s true that our strength in India, again, is the enterprise business. Last year, we grew our share in that business from 14 per cent in the beginning of the year to about 20 per cent at the end of the year. We were number one in one quarter (Oct-Nov-Dec). Our strategy in India is going to be protecting our business in the enterprise space and attack the opportunities in SMB and consumer segments.
Critics say your strength in the enterprise segment is primarily because of the global accounts you have.
Not true. Unfortunately, there are lots of names I can’t share. Of course, we have a lot of global accounts, which are very big. IBM is one. But we have a lot of local accounts. We could not have hit the number one position if we had not won accounts in India.
How are you going to ‘attack’ in the consumer and SMB space?
We are spending a lot of our resources and energy for the consumer and SMB business. Last year, we launched a campaign called ‘Please, Daddy, Please’, which has really worked for us. Our brand preference has gone up by five percentage points. We are now investing to drive the SMB business. We are expanding our retail network. We have about 400 retail stores now and our aim is to take this up to 1,000 by the end of this year, which would make us the largest PC retailer in India.
You have already occupied number one position in the enterprise space. How long are you going to hold this?
We certainly want to retain the position. But it’s a cyclical business. For example, a lot of government buying happens in the Jan-Feb-March quarter and we are not strong in the government space. Clearly, our aspiration is to become the undisputed number one in the enterprise segment. For that, we need to ensure we grow in some of the other segments, like government. and education.
But the government space has its own pros and cons, more challenges than opportunities.
True, but they are a big investor. By working with the system integrators, we are trying to understand the government needs. Our aspiration is to become number one in this country. We have done it in China and we believe we have the products and ability to do it in India.
Have you set any time frame by when you want to become the number one PC vendor in India?
We are not giving a time frame for this. We have some internal targets, which we don’t want to disclose in public. One reason why we are not setting any time frame is that we don’t want to do unnatural things to gain market share. All that I can say is our plan is to build the business.
Sources say Lenovo India was never given a free hand to operate, that there was a lot of interference from China?
They have always given me a free hand. In the last couple of years, an absolutely free hand. They have not necessarily said what needs to be done. They have instead said, ‘Here is what we have done in China and here is what has worked in China. We believe this should work in India. So, why don’t you come back and tell us what you will do and how you will adopt it?’
Does it mean the management has a lot more confidence in the India team now?
It was actually the best way to transfer knowledge, by having somebody from China to work here. I cannot take hundreds of people, train them in China and bring them back.
How similar are the Indian and Chinese PC markets?
The Chinese market is similar but a little more mature. Today, the PC market in India is about 10-11 million, in unit terms. China was at this level about seven years ago. So, both are at different stages of evolution, but similar in many respects.
