Lenovo uses Bollywood icon to burnish its credentials in India
Lenovo uses Bollywood icon to burnish its credentials in India, tipped to become the third-largest smartphone market by 2017
The beaming face that peers out of roadside billboards in Basti, a small town 700 kilometres southeast of New Delhi, is the one connecting Lenovo to a whole new client base in India's hinterlands.
The use of Bollywood icon Ranbir Kapoor's star power in a movie-crazed society is only the latest in a string of marketing initiatives and business strategies that has made Lenovo a household name in one of the most promising markets in the world, with its history of clicking in India offering invaluable lessons for any Chinese company aspiring to multinational status.
"Lenovo has had a long and very strong presence in the laptop space, acquiring a solid understanding of the Indian consumer's psyche," said Jayanth Kolla, the founder and partner at telecommunications research firm Convergence Catalyst. "It has also invested a lot in building the brand, as opposed to other Chinese companies that look for quick returns.
"The average Indian customer doesn't even know that it's a Chinese company."
That is probably because Lenovo does not see itself as one. Its India marketing head, Bhaskar Choudhury, bristles at the suggestion that Lenovo is Chinese. "Look at our brand acquisitions in Brazil, Argentina and Russia," he said. "You would be hard-pressed to find a brand as global as we are."
Lenovo's multinational credentials are hard to beat. It has headquarters in China and the United States, with various key business operations spread elsewhere. Its global headquarters for advertising and marketing, for example, are in Bangalore. Similarly, the company's top 10 executives represent seven nationalities, including two Indians.
Last week, Lenovo reported a 36 per cent year-on-year jump in quarterly net profit to a record US$219.7 million, helped by its status as the world's leading vendor of personal computers, with a 17.7 per cent market share. In India, its market position varies from quarter to quarter, hovering in the top three. According to IDC, Lenovo's market share in India stood at 9.3 per cent in the second quarter.
But with personal computer sales slipping as consumers shift to hand-held gadgets, Lenovo has begun to prepare in earnest for the so-called PC+ era. And that is where Kapoor comes in. Like Hollywood star Ashton Kutcher, who unveiled Lenovo's Yoga Tablet last month, Kapoor gives the brand a connection with youths, the biggest drivers of demand for new mobile devices.
But unlike Kutcher, there is deeper symbolism to Kapoor's choice as brand ambassador. "Coming from a legendary family of actors spanning four generations, he represents a blend of continuity and innovation as he is part of the famed Kapoor clan but is also a star in his own right," Choudhury said.
As the company leverages its aura of reliability and brand familiarity derived from its long presence in India, that also is the message it wants to reinforce about its mobile devices: they come from a long line of stars but are stars in their own right.
Kapoor, who also endorses BlackBerry, dovetails with Lenovo's "doers" advertising campaign, a smart foil to Lenovo's traditional brand ethos of "think", conveyed by its flagship ThinkPad and IdeaPad, as it steps out of the comfort zone of personal computing into a brave new world of handheld gadgets.
Kolla said Lenovo was well positioned for the post-PC world in India. "They have recently launched five smartphones across the entire range of price points - from high to low," he said. "And they have tied up with telecoms providers like Reliance to launch their devices, saving a lot on marketing dollars.
"Their current team also comes with a very strong background in mobile devices, with people who served companies such as Nokia and Sony Ericsson during their heyday in India. Lenovo is positioning itself for the future."
There is a lot riding on India. While PC sales globally fell 11 per cent in the first half of this year, the Indian market grew 3 per cent. According to IDC, India is set to become the third-largest smartphone market by 2017, after China and the US. And much of the sales will come from places like Basti.
About 9.3 million smartphones were sold in the country in the second quarter of this year, up from 3.5 million in the same quarter last year. Lenovo aims to sell one million smartphones in the country and corner a 5 per cent market share this year, for which it is banking on its retail network. From just 150 exclusive stores less than two years ago in India, it now has more than 1,200.
"We were already among the top two brand considerations in the main cities," Choudhury said. "With the Ranbir Kapoor campaign, we are becoming a familiar name in the small cities as well."