Len­ovo India

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Much of Len­ovo India’s growth has been pow­ered by its spec­tac­u­lar per­for­mance in the mobile hand­set busi­ness mak­ing India one of the big­gest mar­kets in the world for the com­pany. Much of the India suc­cess can be at­trib­uted to the lo­cal­ized GTM strat­egy and the com­pany’s abil­ity to seg­ment its mobile hand­setMo­torola and Len­ovo branded de­vices and cou­pled with an ex­cel­lent pric­ing model did the trick. Len­ovo is very good at man­ag­ing mul­ti­ple de­vices in its port­fo­lio. The lin­eage comes from man­ag­ing IBM’s PC and server as­sets and hav­ing its own PC and Sys­tems port­fo­lio. But Len­ovo still is able to man­age the IBM’s Think range and its own sys­tem de­vice port­fo­lios. The same ap­proach in mobile busi­ness helped Len­ovo in India to cre­ate a blended strat­egy.

If we take a global look, the com­pany’s PC and Smart De­vices (PCSD) busi­ness group, which in­cludes PCs, tablets and smart de­vices, Len­ovo’s quar­terly sales were up 4.9% year-over-year to $6.7 bn in Q4 FY 17. For the full year ended March 31, 2017, Len­ovo’s PCSD sales were down 2.3% but beat­ing the over­all mar­ket, at $30 bil­lion.

In the Mobile Busi­ness Group ( MBG), which in­cludes Moto and Len­ovo-branded smart­phones, saw 19.7% rev­enue growth in the fourth fis­cal quar­ter out­side of China, with to­tal sales of $1.7 bil­lion. Fourth quar­ter smart­phone ship­ments in­creased 17.4% to 11.3 mil­lion units out­side China. For the full year ended March 31, 2017, over­all sales were down 5.4%.

In Asia Pa­cific and Latin Amer­ica, suc­cess was led by India and Brazil re­spec­tively, Len­ovo’s mobile busi­ness con­tin­ued to im­prove through­out the year.

In its Data Cen­ter Group ( DCG busi­ness), which in­cludes servers, stor­age, soft­ware and ser­vices, fourth fis­cal quar­ter sales were down 13.7% year-over-year, to $850 mil­lion. For the full year, rev­enue de­creased 10.6% on to­tal sales of $4.1 bil­lion. The com­pany said that it has re-en­gi­neered this busi­ness by adding new lead­ers in­clud­ing in­dus­try veter­ans, de­ploy­ing a ded­i­cated DCG sales force in all ge­ogra­phies, and form­ing new seg­ments to fo­cus on growth cat­e­gories such as high­per­for­mance com­put­ing.

In Asia Pa­cific, Len­ovo’s sales were 18.1% of the com­pany’s to­tal world­wide sales dur­ing the fourth fis­cal quar­ter, and 16.3% for the full year. Con­sol­i­dated sales in the fourth quar­ter in­creased year- over- year by 9.4% to $1.7 bil­lion and for the full year de­creased by two % to $ 7 bil­lion.

In 2016, Len­ovo re­ceived 57 awards at IFA Berlin, and in 2017 it re­ceived 30 awards at Mobile World Congress and 62 awards at the 2017 Con­sumer Elec­tron­ics Show for its for­ward-think­ing de­sign. It also won some of the in­dus­try’s high­est ac­co­lades for prod­uct in­no­va­tion and de­sign, in­clud­ing 18 Red Dot De­sign awards and 6 iF awards.

WE WANT TO BE CUS­TOMER CEN­TRIC IN EV­ERY­THING WE DO

What is your ap­praisal of FY 17 from an in­dus­try and Len­ovo’s per­spec­tive?

In the last year, Len­ovo has de­liv­ered solid re­sults glob­ally, through a se­ries of in­no­va­tive prod­uct launches across the port­fo­lio and strength­en­ing the busi­ness fun­da­men­tals. The in­dus­try in India has un­der­gone trans­for­ma­tive changes in the past year, with sev­eral gov­ern­ment ini­tia­tives in­flu­enc­ing mar­ket con­di­tions. For in­stance, while de­mon­e­ti­za­tion did slow down busi­ness for us in Q4, the pace of con­sump­tion did get back on track dur­ing the next quar­ter. The Union Bud­get, on the other hand, has pro­vided a much-needed im­pe­tus for dig­i­ti­za­tion across the pub­lic sec­tor and ru­ral ar­eas, through the Dig­i­tal India and DigiGaon ini­tia­tives. This has cre­ated an in­crease in adop­tion of tech­nol­ogy across the coun­try, from sec­tions of the coun­try that were pre­vi­ously ap­pre­hen­sive of em­brac­ing tech­nol­ogy. We made good progress on Tablets- mov­ing to sec­ond po­si­tion in the mar­ket as we ex­ited the last fi­nan­cial year. In a nut­shell, the past year has been a dy­namic one and has placed us in an ad­van­ta­geous po­si­tion, to boost busi­ness growth.

What are the 2 big chal­lenges that took most of your man­age­ment time dur­ing the last fis­cal?

One of the key chal­lenges that we had iden­ti­fied in the past was that our cus­tomers were look­ing for a more stream­lined and ef­fi­cient sys­tem for af­ter-sales ser­vice. Re­al­iz­ing this chal­lenge and con­cen­trat­ing our ef­forts on re­defin­ing our af­ter­sales ser­vice, has been one that has held the man­age­ment’s fo­cus. We have sub­se­quently opened up var­i­ous av­enues for our cus­tomers to con­nect with us over mul­ti­ple chan­nels, i.e. Twit­ter, apps and call cen­ters. We also un­veiled a ‘Quick Re­sponse Time’ pro­gram to map onto im­prove­ment in ad­dress­ing our cus­tomer in­quiries.

How would you place Len­ovo in India given the dis­rup­tions hap­pen­ings in the tech space?

Len­ovo is well poised to tap the po­ten­tial within the In­dian mar­ket, given our strong fo­cus on in­no­va­tion. We have been un­veil­ing a se­ries of well thought through prod­ucts, aligned with cus­tomer de­mands, due to the cus­tomer cen­tric na­ture of our com­pany. For in­stance, Gam­ing has been one of the niche av­enues that we have opened up given the in­creased mar­ket de­mand. We truly be­lieve that our growth will largely be de­fined by our unique abil­ity to tap into the mind-set of the mar­ket and adapt with prod­uct of­fer­ings that re­de­fine tech us­age for the con­sumer. The diver­si­fied prod­uct port­fo­lio in Tablets has helped us to sig­nif­i­cantly grow in the Tablet mar­ket. We are the first movers in Multi-modes, with our award win­ning Yoga line of prod­ucts.

What would be the di­rec­tion for Len­ovo India in FY 18: the key fo­cus ar­eas and the growth driv­ers and your In­dus­try out­look?

Most im­por­tantly, we want to be cus­tomer cen­tric in ev­ery­thing we do. We lis­ten to users and bring their voice into the prod­uct de­vel­op­ment process. Our role is to en­sure that the voice of our cus­tomer is heard- to col­lect in­sights and fig­ure out how we feed that into our prod­ucts and of­fer a richer vis­ual ex­pe­ri­ence to our cus­tomers. We want to be #1 in 2 years in the PC and Tablet mar­ket. We want to be the leader in af­ter-sales ser­vice. We are also fo­cused on work­ing along with the Gov­ern­ment in our aim to be­com­ing a truly dig­i­tal econ­omy post the GST roll out, we are look­ing to ad­dress the com­put­ing needs in the SMB seg­ment. We will con­tinue to in­no­vate and pro­vide peo­ple with richer, and more Im­mer­sive ex­pe­ri­ences.

—RAHUL AGAR­WAL MD & CEO

Source: DQ es­ti­mates rev­enue (`crore)

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