Lenovo sees an overwhelming success in consumer business with help of channel

The biggest strength for Lenovo today is its channel and this differentiates it from the rest of the brand. In an interview with VARINDIA, Rajesh Thadani- Executive Director- Consumer Business & E-commerce, Lenovo India attributes the great show that Lenovo has put up in the consumer space in the last 2 quarters to the channel -

The business that Lenovo does today – whether it is commercial or consumer is completely channel oriented. Guided by a channel first philosophy, Lenovo wants to grow with its channel and continue to build on its core channel philosophy. 

“Enterprise is the only space in which we involve our direct sales people, but if I look overall as an organization our business is completely done through channel. As compared to some of the other brands, we look at channel a little more differently. For us we have this core channel philosophy, where we work with a few partners but work in a much deeper way. Today if I do business for the consumer division, I have a sub-distribution channel network in which around 50-59 partners work with Lenovo. Similarly, for exclusive stores of Lenovo, we do business with close to 600+ of them. And we also have a large number of multi-brand stores that we work with,” explains Rajesh Thadani- Executive Director- Consumer Business & E-commerce – Lenovo India.

The idea of the core channel philosophy is that both Lenovo and the partners invest together. So that ways each of them have equal stake on the ground, and the commitment level becomes higher. “For instance, Gujarat is a state where we are doing extremely well and are the #1 brand there. We have a partner who handles the entire Gujarat state and if you look at the volumes that we do with him, we do almost 10,000 – 12,000 boxes per quarter. If I go back in time, 4-5 years back the volume was far low.  So we have grown eventually and at the same time our partners have grown in that market,” explains Rajesh.

Under distribution, Lenovo has created the Express Channel (the exclusive stores). The idea is to create more profitability for the brand and the distribution partner. Out of the 600 stores, 400 are exclusive. While 170 of the stores do business with Lenovo directly by buying through its tier 1 partners, Express Channel is driving around 30-35% of business for its distribution channel. Lenovo has also invested in these stores in terms of branding, putting people on the floor and in-store promotions that have eventually helped Lenovo grow its business. 

At the same time, Lenovo also tries to empower its channel in the best possible way. For instance, in exclusive stores, Lenovo has invested in close to 500+ in-shop demonstrators inside the stores, and has invested in people, training, and consumer experience tools like Planogram. 

“We also ensure that the partners make more money from this. We are the only brand that has helped them with the GST impact, since partner profitability has been impacted. We did not want to wait and see how other brands react to such a challenge and so decided to invest in it and support them from a profitability perspective,” says Rajesh.

He further continues, “When we talk about the distribution partners, we have enabled them from a sell-out perspective. We have a huge field force - Area Sales officers who work with our RD partners, to help them drive sell-out and work with many more partners. We deal with more than 6000+ partners under the distribution partners,” he says. 

Opportunities for Lenovo...
Lenovo is seeing a couple of things that stand as an opportunity for the brand. “If we see the overall market, we know that the PC market has flattened, but if we see the trend the traditional clamshell laptops are going down but new emerging technologies like gaming laptops, convertibles and thin & light laptops are on the rise. We see this segment growing at more than 100%. If you look at the current investment, in terms of product and channel we make sure that we have the great products right now and keep on refreshing the complete product line from entry to mainstream,” Rajesh assures. 

There is a huge trader community who would need an infrastructure if they get into the GST regime. They will need a PC, printer, and Lenovo clearly sees that as an opportunity growing. “My desktop business, my AiO business in which Lenovo leads is clearly seeing a growth of 15-20% post GST. So these are the 2 trends that we see – emerging technologies on the form factor and GST driving the next level of growth,” he reiterates.

The recent IDC report states that Lenovo has hit an all time high on the consumer market segment. If both the quarters are combined together, Lenovo has emerged as the #2 brand. “So clearly we have grown around 30% YoY. This business is all about doing the basics right; we made sure that the basic 4P elements are in place. We make sure the products that are the heart of the 4P are in the best possible range across price bands. This has helped us to get consumer acceptance,” sums up Rajesh. 

Samrita Baruah
samrita@varindia.com