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HP, HCL feel the heat of Lenovo
Bibhu Ranjan Mishra
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July 26, 2006

Aggressive brand-building measures initiated by Lenovo - starting from Kaun Banega Crorepati to Sa Re Ga Ma and from roping in Bollywood siblings, Saif Ali Khan and Soha Ali Khan, to the advertisement campaign during the West Indies tour of the Indian cricket team - have finally started to pay off.

According to a report by research firm AC Nielsen, the brand awareness in India about the Chinese personal computer giant has risen from 38 per cent to almost 70 per cent in the last four-five months.

"The awareness gap with our competitors has come down significantly. Our emphasis is now going to be translating the awareness into business," says Ajay Mittal, vice-president, Brand & Marketing, Lenovo India.

Lenovo has not done bad revenue-wise either. It claims to be the number three in the world and the number two in India - next only to HP. IDC figures, however, state that in terms of unit shipments in the overall PC market in India, Lenovo ranks third with about nine per cent share.

HP stands the first with 19 per cent while HCL [Get Quote] the second with 13 per cent market share. Mittal asserts that in the next 12-20 months, the company will try to narrow the gap.

Lenovo started in India from scratch after acquiring IBM's PC businesses almost a year ago. The company, which completed its one-year of existence in the Indian market on May 1 this year, considers the country the fastest-growing market outside China as the PC penetration rate is increasing significantly here.

Besides, this is the only market outside China that has become consumer-driven. Says Mittal, "The branded PC market in India is divided into various customer segments. In the enterprise segment, we have already achieved growth in line with the market. The next focus area for the company is going to be the consumer market, and the small office and small businesses."

As part of this initiative, the company has re-aligned its business into a dual business model comprising a transaction-based business model for transaction customers and a relationship business model catering to enterprise customers.

"This has streamlined our efficiency as it allows us to focus on different customer segments, starting from large enterprises to SMBs, SOHO (small office/home office) and consumers, by identifying the needs of each segment," he adds.

In the consumer segment, the company has recently launched Lenovo TFT (flat panels) sleek monitors and F, Y and Q series of notebooks in India. In the desktop space, the company already has its Lenovo-3000 Q and H series of products for small businesses and, in the in the mobile space, it had initially launched Lenovo C-100, a 15-inch monitor-base offering.

Towards the end of April, the company extended its offerings in the mobile space by introducing Lenovo N-100, a wide-screen offering. "All these products are designed looking at consumer attributes as the primary target. Now, our efforts will be to consolidate these offerings and expand to other segments by bringing in newer products," Mittal says.

The company is also looking at expanding in India geographically by moving into C- and D-class cities, which is critical for small business/small office prospective.

During the last one year, the company has opened 44 exclusive storefronts, purely to sell Lenovo products and 120 multi-brand outlets. In the next one year, the company is looking at doubling the - storefronts and multi-brand stores.

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