Lenovo bets on small town retail

Driven by the prospects of commendable growth and potential of an evolving market in tier-3 and tier-4 cities, Lenovo India has set a target of opening 1,000 Lenovo Exclusive Stores (LES) in these cities, in the quarter ending March 2012. Recently,

Gartner reported that Lenovo has moved up from fourth to third position in the Indian market with a q-o-q growth, reflecting an aggressive marketing strategy. Today, major PC vendors are aiming to gain a foothold in the untapped market of smaller cities. Lenovo, in terms of expansion, has identified LES as one of the major growth drivers after its relationship segment, where it is #1 in India. Speaking to The DQ Week, Rajesh Thadani, head, consumer business unit, Lenovo India, said, "When it comes to expansion, exclusive retail stores are one of the clear areas identified by us. Today, consumers from smaller cities are looking forward to buy products from a retail store. We are absolutely optimistic about the growth."

Lenovo plans to have the biggest expansion in the LES category and currently has 170 exclusive stores in tier-1 and tier-2 cities. The company already has 700 LES across the country and plans to generate 25% of revenue in the consumer segment from LES. The company has scaled down the number of regional distributors from 60 to 42 as Thadani said, "It's not reduction, rather consolidation, and from the strategy perspective, we are looking at more exclusivity in LES from regional distribution segment. We have re-aligned the distributors and defined their area of operations in terms of geography and production. Instead of working with more partners, we will work with core channels."

Lenovo operates in 3 segments-relationship, consumer, and SMB. The company has gained momentum in relationship management and bidding for ELCOT tenders. Thadani further stated, "Now the relationship business has grown well and we have been the undisputed #1 in India with growth on a q-o-q basis. The retail strategy has also paid off well with a 10% rise in the consumer segment business."