China makes its mark in Indian market

The Lenovo logo on the wall at the Chinese company's Indian branch in Bangalore. The company, which took over IBM's personal computer arm in 2005, now has a bold plan to surpass all its competitors to become the largest player in India by 2014. [China Daily]

When Amar Babu first joined the Chinese computer maker Lenovo Group in India in November 2007, what he faced was the aftermath of a typical business failure: Lenovo's local market share had dropped by nearly a half, management had quit the company and local sales partners were demanding payment.

But that did not prevent the veteran executive from turning India into one of Lenovo's most successful overseas markets.

During the past two years, business for China's biggest PC maker has not only survived the financial crisis but also won market share from rivals. Its market share in India has risen from about 5 percent in 2008 to more than 9 percent in the last quarter, ranking it fourth after HP, Dell and Acer. The Chinese company, which took over IBM's personal computer (PC) arm in 2005, now has a bold plan to surpass all its competitors to become the largest player in India by 2014.

"If we can be a strong No 1 in China and, giving the similarity between the two countries (China and India), why can't we be the No 1 in India?" said Babu, managing director of Lenovo India.

He said because India is "a little behind China" in terms of economic development, market penetration and maturity, many of Lenovo's successful experiences can be applied to India.

As part of its global strategy to steer away from relying on advanced markets such as the US to fuel overseas growth, Lenovo started to focus its expansion on emerging markets such as India and Russia after its business in the mature markets was hit hard by the global financial crisis in 2008.

During the following years, Lenovo has successfully employed tactics that have made it China's PC market leader, including offering colorful models and products that are cost effective and using retail franchises with insight into their individual markets.

Although India is the world's ninth biggest PC market, Babu said the country has a huge potential for growth due to its vast population, growing numbers of young people and relatively low PC penetration.

"If you take what China was seven years ago, maybe that's what India is today," said Babu. He said the subject he often raised with his Chinese colleagues was: "Tell me what you did seven years ago."