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PC Sales Will Be Back In The Reckoning Post Covid-19, Says Lenovo’s Rahul Agarwal
Undeterred by the newly mandated scanner on Chinese investments in India, the CEO & Managing Director of Lenovo India asserted that the company would continue with long-term expansion plans
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In a country like India where personal computers (PC) penetration is abysmally low vis-à-vis other emerging markets such as Brazil and China and where electronic transactions and learning are picking up pace, Beijing-based computer hardware and electronics maker Lenovo is hoping to capitalise on the “unprecedented demand” for its products.
The CEO & Managing Director of Lenovo India, Rahul Agarwal, stated this in a conversation with BW Businessworld & exchange4media Group’s Chairman & Editor-in-Chief, Dr. Annurag Batra in the eighth episode of the ongoing ‘BW Dialogue on Leadership’ online series.
“A part of the PC market was earlier eaten up by smartphone market. PC as a category will become more relevant. With Covid-19 induced lockdown, PC is back in the reckoning in the minds of a family man, especially those who have school going children between class 5-12. Secondly, India was always a one PC-household and now it is two PCs (per household),” Agarwal said.
He explained that while one part of the market like ‘Learn from Home’ will grow, other part of the market may get negatively impacted because of low buying sentiments as some people may not replace their old computers. “Our sales mix is 60 per cent commercial (segment) and 40 per cent consumer (segment). The equations may change mildly as the consumer segment might grow a little bit. On the other hand, the commercial (segment) might go down because of no new employees,” Agarwal revealed during his e-chat with BW Businessworld.
Might of a Multinational
Undeterred by the newly mandated scanner on Chinese investments in India, the company asserted that it would be going ahead with their long-term expansion plans. As Agarwal points out, “An MNC which is present in 200 countries, is a market leader, and is also a US$ 56 billion company is not from any particular country. We are a global company and have always taken pride in the fact that we are the best example of a combination of the east and the west. There are more senior folks that sit out at Raleigh (capital of North Carolina, US) than out of Beijing (global HQ). And if you look at the Asia Pacific leadership, it is coming from 11 nationalities. If somebody sees it that way, then we are not seeing it in the behaviour of our customers because we sell B2B (business to business), SMB verticals consumers, etc. We sell tablets, workstations, etc. Honestly, I see this coming more from the media than the customers.”
When asked to shed some light on its make-in-India programmes in the future, Agarwal explained, “Manufacturing is a functioning of many things. But two things are important. One is scale and there has to be a commercial incentive for large players to shift their manufacturing base. That has already happened with the smartphone category because it is more expensive to import a mobile than to manufacture it here. It is not the case with the PCs. We have been talking to the government and feel that there could be some incentives which could be export related or duty related. But there has to be some incentives for companies like ours to move their manufacturing base from large factories in China and some of the other countries.”
Old & New Consumer Habits
When asked if the buying patterns of the consumers will change once the lockdown is lifted, Agarwal observed, “Yes, there will be people who would be hesitant to go to a store. But my personal belief is that when stores open up and when life becomes back to normal, people still want to go out and check out different models and spend three hours before they shell out Rs. 40,000 on a laptop.”
On the company’s plans on re-entering the booming smartphone market, he maintained, “We are already there with Motorola which is a Lenovo-owned brand. The business has gone a little backwards in the last couple of years. We have chosen not to play in all segments of the market and in all geographies of the world. But we are very much there in the smartphone space and our products are top-of-the-line. With the influx of Chinese players, we have walked out of economy bracket of the market. We are there and you will see us grow more in the next few quarters.”