JOIN USOpening “experience” retail stores for the Small and Medium Businesses (SMBs) to offer technology available previously through exclusive tie-ups is part of a new strategy that hardware vendor Lenovo has adopted.
According to the company, India has 25 to 27 percent SMB market, presenting tremendous growth oppurtunities.
“Even if you exclude the ELCOT deal (sealed by the company earlier this year with Tamil Nadu government to supply 300,000 laptops), the SMB market for us has been nearly 22 per cent,” Lenovo India’s director for SMB business Rajiv Rao told Deccan Herald.
Regarding the new strategy Rajiv said that the segment is fragmented and requires a lot many things like financing or rudimentary technology to suit its specific needs. This prompted us to get back to the drawing board and design a new strategy.
The retail store for SMBs was launched with the opening of the first outlet in Pune, followed by the second in Jaipur last week. Besides the ‘Thinkpad’ brand, which Lenovo inherited from IBM, the stores would provide all IT components, giving potential clients an idea of how they differ from competition.
Besides the distribution model, Rajiv said Lenovo has also opened Value Added Reseller (VAR) as a new channel through which it provides Thinkpad solutions to customers of 200 partners.
“From an exclusive distribution model, in just a year ago, we have branched out into a multi-channel approach to reach out to the SMB segment in India. Now, the VAR alone make up 35 to 40 per cent of our sales in a short span of a year,” Rajiv said.
“We regard the VAR channel to be important since we can use the same route to offer various other end-customer requirements such as storage, workstation etc.”
Lenovo’s market share in the SMB segment grew from 3.8 per cent in Q2 2011 to 7.3 per cent in Q2 2012 according to figures from IDC, indicating that the segment has been emerging as an important one for the hardware vendor.
Small and medium segments, despite being touted as the potential goldmine for IT, has been growing briskly as a result of the trickle down of technology once considered affordable only for the larger enterprises. Rajiv Rao agreed that cloud and smaller form factors are prompting SMBs to look positively at technology adoption, though cloud adoption is yet to cross the tipping point.
“We’ve just launched a product called ‘Tiny’, a smaller device meant to save space and energy for the SMBs. Combined with slates and tablets, they are certainly disruptive at the SMB segment,” he said.
“We’re all awaiting Windows 8, due to release by end of the year, which will make acceptability of smaller and more effective devices much easier. Together with Android devices, and with Ultrabook (for enterprise segment) we are in for some exciting times.”