PC-maker Lenovo banks on GST-ready solutions

Abhishek Law Kolkata | Updated on January 10, 2018

Upbeat on new offerings Rajesh Thadani, Head and Executive Director, Consumer & E-Commerce, Lenovo India   -  Debasish Bhaduri

Chinese company rolls out desktops and notebooks targeting small enterprises

Laptop and PC-maker Lenovo is banking on Goods and Services Tax (GST) to drive growth in an otherwise slowing down desktop market.

In fact, Lenovo – amongst the top three PC vendors in the country – has rolled out a comprehensive range of GST-ready solutions across its desktops, and notebooks, targeting small office and home office (So-Ho) segment that mostly includes small and medium enterprise and consumer retail offerings.

According to Rajesh Thadani, Head & Executive Director, Consumer and E-Commerce, Lenovo India, GST has made it vital for small businesses to embrace digitisation.

The Chinese PC maker hopes to enable small businesses and entrepreneurs with GST-compliant accounting offerings (on its devices).

The company has collaborated with solution providers such as “IDOS” and “Marg”, in this regard. “The offerings have been launched. While it is too early to comment on numbers, we expect traction to happen around October–November onwards,” he told BusinessLine.

In fact, initial numbers from Lenovo suggest that the desktop segment is growing anywhere between 20 and 35 per cent year-on-year since roll out of GST in July. The increase has come in after two years of decline or flattish desktop sales.

April-June PC sales

IDC’s segment-wise data show that the consumer desktop segment accounted for a minority share of around 12 of the April-June period PC shipments. In the January-March quarter, it has a 10 per cent market share.

The commercial desktop segment, accounted for nearly 33 per cent of overall PC shipments in India (April to June), up from over 28 per cent in the previous three months.

Meanwhile, numbers released by the agency also suggest that Indian PC market shipments have seen a 19 per cent decline, quarter-on-quarter to 1.75 million units during April to June period, due to the impact of GST implementation.

The consumer segment bore the brunt. The consumer notebook or laptop segment accounted for a majority 34.4 per cent of PC shipments in India between April and June, which declined from a 38.4 per cent in the previous three months (January-March). Commercial notebook accounted for 19.6 per cent of shipments in India during this period.

Investing in niche segments

Admitting that growth continued to be slow in the consumer segment, Thadani pointed out that Lenovo was investing into niche categories such as convertibles, ‘thin and light’ and gaming PCs (laptops). Advertising and marketing spends in the segment have doubled for the hardware-maker.

The niche or premium segment was witnessing an over 100 per cent year-on-year growth and the category market share has more than doubled to 13 per cent (from 6 per cent) over a two-year period.

“New form factors are expected to be the future growth drivers. We are targeting conversion of old users into these new form factors,” he added.

Price tweaks have also been initiated to push these premium devices. For Lenovo, Thadani said, the ultimate target is to be the top PC vendor (across laptops, desktops and tablets) in the country in two years.

New vertical

The company is also exploring the option of introducing a new line of business focussing on artificial intelligence – that include virtual reality and augments reality-based offerings – in the coming days.

“We are still evaluating the scope of introducing the new offerings around AI,” he added.

Lenovo’s existing verticals include its laptop and PC business, mobile phone business (through the eponymous brand and Motorola) and the data centre group.

Published on September 15, 2017

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