Lenovo wants to do a China in India

NEW DELHI - Personal computer (PC) manufacturer Lenovo, struggling at the fifth position among PC makers in India, is looking at emulating its China success in other emerging markets including India, a top official said Tuesday.

We have restructured our global business and have divided markets into the emerging and developed market categories. Our thrust remains on the emerging market because of the tremendous potential, and we will bring in the best practices from China to these markets, Lenovo India managing director Amar Babu said.

India remains on the top of the pack in our emerging markets business, he told reporters here.

Lenovo, which started off as Legend in 1984 in China, commands over 30 percent of the computer market there. The big deal which sprang the regional player into the international arena was the acquisition of IBM’s personal computing division in 2005.

We have grown over a 100 percent in terms of market share after we took over IBM, Babu says.

According to technology research firm IDC, Lenovo’s market share slipped from 6.6 percent of the Indian PC market in the last quarter of 2008 to 4.7 percent in the first quarter this year when the Indian PC market contracted 19 percent year-on-year.

Babu blamed the economic slowdown coupled with a dramatic shift in the PC market from mid and high segment products to the lower segment alternatives for the bad performance.

We have traditionally been a strong player in the mid and high-end computer market, he explained.

Babu added that the company has taken lessons from the parent in China and would diversify across segments. It is planning to launch over 50 new product this fiscal.

As part of its expansion plan, the company will add 30 new retail outlets, taking the total number to 150 and the number of service centres would go up from 130 to 250.

India with a population just a fraction less than that of China has a high growth potential considering the yearly PC sales are still as low as 7.5 million as compared to 40 million sold annually in China, Babu said.

We support the government’s endeavour in providing broadband connectivity which is a prerequisite for the hardware market to grow.

According to latest data, India has about 6.4 million broadband subscribers as compared to over a 100 million in China.

We also need support in form of provisioning of loans for consumers and SMEs (small and medium enterprises), Babu said.