One of the biggest worries of being a Chinese company wanting to make inroads into India is gaining trust of the customers who approach brands from that nation with caution. But Chinese-origin company Lenovo has had a smooth sailing on that front as it continues to make steady gains by winning consumer trust and confidence leading to rising sale of their brands. Much of the credit for the stellar showing goes to its Managing Director, Amar Babu, who has carved out niche priorities which he feels would enable the company to become a leader in the space.
In conversation with MxM India’s Johnson Napier, Mr Amar talks of Lenovo’s dazzling growth story in India, on the parameters that have set Lenovo aside from its peers and how the company plans to replicate the dominance that it shares in China and Japan in India too. Excerpts:
You’ve managed to throw up impressive growth figures in 2011-12. How would you define the year for Lenovo in India?
We’ve had an excellent year where we grew in excess of 40 per cent y-o-y in a relatively flat market. We have managed to move to the No. 2 position with a market share of 13.7 per cent. We had our strategy of protect and attack where we protected our strength which is enterprise business and attacked our opportunities in SMB and consumer. So we invested in retail outlets and we invested in the brand; which is where we need to improve our positioning of the brand and our reach with consumer and SMB. The strategy would be similar; we are not going to change the fundamental strategy where we will continue to protect and attack. But the nuance will change as today we have more than 1000 retail outlets, we now need to ensure that all these outlets are productive and profitable. So while we had invested in the brand and created a larger framework now we will work and try and continue that journey and try and relate that brand to a wider range of people. So we believe we have the right strategy; it has worked brilliantly for us till date and we hope it will deliver equally well as we move forward.
Despite being a relatively new player in the space, you attained the No. 2 spot in a short space of time. What were the factors that helped you achieve that kind of growth?
We took over IBM business over six years ago but as you said, we are a relatively new player in the market. I think what has worked for us in the first place is products – as a technology company we need to have the right products. A technology company is as good or bad as its products. We do have great products – whether it is the ThinkPad range of enterprise business or whether it IdeaPad range of business, we have great products with us. The second most important thing is partners. We’ve really built a nice network of some strong and loyal partners. Those channel partners make a difference to us especially in the consumer and SMB business and also in the enterprise business. And the third is the brand. We have invested in the brand in a big way – Lenovo as a brand has a good awareness level, what we are now trying to do is build the preference so that we may be more in the consideration set and the preferred brand of consumers.
What was remarkable for Lenovo was that you achieved stardom when the rest of the players were seeing a slump in sales due to the economic turmoil. How would you explain this phenomenon?
There are two areas that we invested in — one is we invested in the brand during the slowdown and created a communication where we said we are ‘For those who do’. It is for people who use technology as a tool and not as a badge and we wanted to build the association by targeting the youth. So we invested in the brand. The other thing is that we invested in our retail outlets. Two years back we had 150 exclusive retail outlets and today we have more than 1000 retail outlets. So we have worked with our partners and are today the largest retail & IT company in the country. Also, we have invested sufficiently in our sales network. Earlier we had service centres in a little less than 100 cities, today we have service centres in excess of 400 cities. Again, we have invested significantly in our post-sales service so that we can provide great service to the customers.
Apart from urban and metro cities, have you made a conscious effort to reach out to more markets across India?
If you see how our 1000 stores have panned out, most of them are beyond the top-15 cities. Clearly our focus has been beyond the metros and that’s where now since we have got the infrastructure on the ground we would also like our brand to be related to that part of the world and not just metro cities.
How does Lenovo India view the digital medium that’s caught the fancy of many players?
I look at digital as a medium, just like television or print. But digital is an important medium because in print or television you communicate one way but in digital you have the ability to improve customer engagement and it’s a two-way process. We have done a lot of work on digital including tying up with projects and companies for various assignments. So digital for us is important as one, people research online but purchase offline. So the offline purchases are the retail stores whereas the research online is what we need to do. So we need to ensure that we are present in terms of communication. Second, is to increase brand engagement. Clearly, digital plays an important role in both these areas and we are investing heavily in the medium.
What would be your focus areas going forward?
What we now need to do is take our messages beyond the top 15 cities and see how we can be a little more of a mass brand, especially in the upcountry markets or what I call India 1 and India 2. In India 1, Lenovo is well-known and has good preference but in tier 2 we have to do some work and are aggressively pursuing that. But the bottomline is we need to ensure that we are able to send across our message to both these markets and increase our awareness.
When do you see yourself emerging a dominant No. 1 player in India?
We are the No. 2 player right now but the aspiration is to be the leader. I am not saying that we will achieve it this year, but clearly that’s the path that we would like to go towards. We are No.1 in China with over 35 per cent market share, we are No. 1 in Japan with over 27 per cent market share so clearly that’s what is the dream in India too – to be a No. 1 player soon. Though I must say that we are not in a hurry to race to the top; the plan is to build the business and stay there. I am not in a hurry to get there but yes, I would want to get there as soon as possible.
Photograph: Fotocorp
Lenovo has launched the ‘Pitch to Her’ campaign in association with Yuwa. Yuwa is a social development platform for girls based in Jharkhand that imparts training in football, provides free education and creates awareness about social evils like child marriage and domestic violence. As part of this initiative, Lenovo is calling the brightest minds in India to hack real world issues with technology and propose interesting ideas of change. Last year, Lenovo cheered for Yuwa and brought their story to millions of Indians as the Yuwa girls they took on the world’s best in the USA Cup – one of the most reputed international football tournaments for young girls in the world.