Lenovo is on the verge of diving head first into the chasm of the computer market in Bangladesh. Will it land on its feet victorious, beating the contestants? Regardless, the company is determined to be a pro-active player in the PC and smart device marketplace in the country.
The reason Lenovo is so interested to bolster the company’s business is clear though. It is what everyone else is doing to acquire the emerging market, of which Bangladesh is a part. Not content with the third position that it currently holds in the PC market of Bangladesh, Lenovo is all geared up to push the brand hard to go to the top and stay at the top. We learned about this from none other than Rajesh Thadani, the head and executive director for consumer and e-commerce of Lenovo India. We talked to Thadani during his visit to Bangladesh in mid-December. Here’s the excerpt from that interview:
FINTECH: Tell us a little bit about what you do and Lenovo’s operation in Bangladesh.
RT: Let me first give you a little bit of background of the organisation. The company was formed in 2005. Lenovo was first formed as ‘Legend’ in China. It was the number one brand in China. It was looking to expand beyond China and that point of time IBM was in a transition phase. IBM was looking to get out of the PC business and focus more on the solution side of the business. Lenovo acquired the PC business of IBM in 2005. And if you look at now in 2017, since the time we took over, if you look at PC and tablet together, we are the number one brand in the world.
In PC we have over 20 percent market share. Our chairman Yang Yuanqing realised that PC alone may not be enough to drive our growth. PC is here to stay, but in many places the market is declining. So, it was important for to look beyond PC. We diversified into smartphone, tablet, server and so on. What we acquired from IBM, in fact, was not just the hardware, but we also acquired the ‘System x’ server and associated services. So, we are now able to provide end to end services for all our enterprise customers.
The second part of the business is smartphone. We started our own brand of smartphone as Lenovo. Along with IBM we had also acquired the company Motorola, which is a big brand. In India and Bangladesh, it was a very big brand in the past. But some of the more mature markets it is still a very strong brand. So, the idea was to expand not only in the emerging countries, but to go mature markets as well. That is the reason why we acquired Motorola.
So, from PC we have expanded into tablets, smartphones, servers and we will keep expanding. What you will see coming from us, beyond PC, tablet and servers, is that we will expand to products around AR (Augmented Reality) and VR (Virtual Reality). These are all cloud based solutions, IoT based solutions, where you will see us rolling out our products. In fact, we have already done so in some of the mature markets. But we will soon bring them into India and Bangladesh. May be sometimes in the next financial year you will hear from us about that.
I take care of the operation of consumer business in India and South Asia. Sri Lanka, Bangladesh, Nepal, Bhutan are part of our South Asia operation. I also look after e-commerce business in India. Even though we don’t have a local office here in Bangladesh, we do have local staffs. we are looking and adding more people to expand our reach in this market. We will start adding more people from the next quarter.
Lenovo partner with local companies to deliver its services. These providers are trained by Lenovo and equipped with the proper knowledge to serve the customers. We have a number of qualified engineers in Bangladesh. This is also the model in India. We have Lenovo run service centres in big metros, but for the most part of the country we operate through service partners only. It’s a very typical business model that is not unique to Lenovo, but utilized by all brands. But we make sure that they follow our guideline, they are trained enough and have enough space to take care of the customer service. We make sure we have the right partners and right infrastructure.
FINTECH: People here still think about Dell HP as the primary go to option in PC. Are you thinking about a renewed branding efforts in the emerging markets and in Bangladesh?
RT: I think that’s a good question. As I have already mentioned, we are number one in what we call PCSD or PC and smart devices. In PC we have 21.5 percent market share globally, as we exit the last quarter. In India it’s about 24 percent overall. And if you look at consumer, we hit close to 19 percent market share by the last quarter. And if I look at our position globally, in PC business we are number two. In India we became number two in the last quarter. In Bangladesh we are still number three. But we are growing very fast. We have grown almost a 125 percent in the last one year. And in the grand scheme of things, Bangladesh is one of the key focus markets in South Asia.
One clear differentiation with HP and Dell, I would say, is our products. If you look at Bangladesh, you have all the products coming in here. We have made sure that all the products across the board, whether it is our entry notebooks or mainstream or premium, we have our entire portfolio products announced in Bangladesh. And the new offerings from Lenovo is extremely exciting from the consumer perspective. Everything from the Ideapads, gaming notebooks to convertibles will be available here. We have a lot of thin and light options, ensuring computing on the go.
And our products are, as we call it, ‘future ready’. We have features like 180 degrees so that you can tilt all your notebooks to a flat position. There is the anti-glare screen; normally this is available only with the premium range. But we have made it available on entry set of notebooks. Then there is two by two (2X2) Wifi, which is much faster than normal Wifi technology. We have ‘Thunderbolt’ charging typically used for smartphone, but we made it available on notebooks. Few laptops have the ‘type C’ port, but we have it even on our mainstream notebooks. That’s what we mean by ‘future ready’. And what that does is that if a customer is investing in our products today, he should be able to use that notebook for the next three years. The idea is that the technology will not be obsolete in the near future.
And then there of course the brand itself, coming back to your question. We are going to be invested in both above the line and below the line. For below the line we are looking at shop branding etc. We will also be looking at above the line, like a lot of brand campaigns, be it the social media or print. We would want to do a combination of the two. And we have a strong brand to begin with. We were the first one to introduce the 360-degree convertible notebook. As a result of that Yoga has a very strong brand value. We want to extend that whole leadership in convertible to Bangladesh.
We will be looking how create a strong brand around Yoga. And then the next new big thing is gaming. We have renamed the entire range of the company’s gaming machine under the umbrella of ‘Legion’. Here we will have a complete suite of products right from casual gaming to amateur gaming. So, Legion and Yoga are two main sub-brands that we will work to build and amplify in this market. These are two strong sub-brands around which our whole grand-strategy will revolve. That’s where we will invest more.
FINTECH: Where do you see the interoperability between smart devices and PCs are heading?
RT: Smartphone as a device, people may debate this, but it’s still largely a consumption device. It’s a content consumption device. Obviously it stalled the growth of PCs. PCs used to be bought not just for all kinds of basic needs like connectivity etc. Many of these basic needs of the consumer have been taken care by smartphones. That is the reason why the PC business isn’t growing as much.
But as for content creation, as a productivity tool or education tool, PC continues to be the primary device. Smartphones will never replace PCs as a content creation device. They have to co-exist. That’s why we see that consumers have multiple devices. That’s the reason why we saw devices like tabs and smartphones to be natural extensions to our business, because they sit along with PC in the ecosystem.
FINTECH: Although that has proven correct so far, don’t you think the emergence of AI and IoT might empower mobile devices for the tasks that can’t be accomplished on them now?
RT: That will improve experience. IoT will give you cloud connectivity, but you will still need a basic computing tool. You will not need heavy rack servers, on the enterprise side of things. This will increase efficiency. But PC will be your basic device for connecting. My understanding is that PC will not be replaced.
FINTECH: You became among the two largest PC manufacturer in India organically. Are you looking to replicate that kind of model in Bangladesh?
RT: Absolutely. There is no reason not to. If you are a leading brand globally, you would want to extend to all places. In Bangladesh we currently have 450 partners. We want to grow more in terms of providing reach and invest in infrastructure like services and brand. And wherever we have a successful formula that worked globally, we would want to replicate those successes in Bangladesh. We would want to be number one, but at the same time we believe in sustainable growth. We don’t want to do unnatural things to get to number one. It’s a journey and we want to make sure that we do the right things. We believe in long-term investment, growing quarter-on-quarter, year-on-year and eventually get to number one and stay there. That’s our clear vision.
FINTECH: So, to quantify that a bit more, where do you see Lenovo in the next five years in Bangladesh?
RT: That’s very difficult to predict what’s going to happen in five years. But the ultimate vision is to get to number one. It doesn’t matter how many years that might take. We want to go beyond PC, as I already mentioned. We want to lead with our enterprise business, our server business, mobile business as well, and not limit ourselves to just PC. We want to be a leading technology player.
FINTECH: Mr Rajesh Thadani, thanks very much for talking to us.
RT: My pleasure. ■