Business startups and students in sights of Lenovo

Bhaskar Choudhuri, chief marketing officer at smartphone, tablet, and PC maker Lenovo Asia Pacific

With digital transformation being a key focus, Asia Pacific is now more appealing to technology players. What is Lenovo’s marketing strategy for the region and Vietnam in the upcoming year?

The Asia Pacific market is very diverse. On the one hand we see economies like Japan, Australia, and Hong Kong which have high income per capita and therefore, a very high penetration of personal computer (PC) users. On the other hand, markets like Vietnam, the Philippines, and India see the PC penetration percentage remain very low at around 20 per cent, while the threshold in Japan, Australia, and Hong Kong is 78 per cent. So, our big opportunity and strategy in Vietnam are figuring out how we increase visibility, how to increase PC penetration, and how to get more new people to buy PCs.

We are looking at people who are students, and those who are moving up the income ladder. PC penetration is just our first strategy for the Vietnamese market. We plan to begin with this to build a smart device ecosystem. Once you have higher PC penetration and once you have higher mobile penetration, you will then create higher smart device penetration.

How can Lenovo realise its plan in Vietnam and other countries in the region where income per capita remains low?

There are two main challenges. Obviously, it is very difficult for a poor family to spend $500 to buy a PC because that is a significant amount of money.

So, we look at what can be done to make computers more accessible – by going through schools, offering easy, equal monthly instalments and buying options, anything which makes the purchase of PCs more important and much easier.

The second is relevance. For most of these families, maybe the head of the family or the father or mother, they are still conversing.

And they would ask why their child needs a PC. So you have to establish the relevance and carry out fundamental category building where you have to show how a PC can really build their daughter’s or their son’s dream, and open up new educational and job prospects for them.

Digital literacy is becoming a big driver of careers because jobs are not necessarily coming from manufacturing – a lot of new jobs are actually being created for the digital future and through digital literacy. To this end, we need to see how to identify those particular products which can have an effect on the younger student.

There’s very little chance that people over 50 years old will start using a PC. As much as 60 per cent of the world’s young population lives in Asia, and new buyers are going to come from the student plus maybe the 16-25 age range. Along with identifying products, we also have to make it available at a price point which is still affordable.

A platform that can help increase penetration is gaming, so we are actually now looking at gaming in a very serious manner.

The other phenomena we see involve many people starting their own business, and a lot of these startups are either digital-led businesses or digital-only businesses – very rarely are they getting into manufacturing.

This is the key that gives us a great opportunity to increase our penetration in terms of small- and medium-sized businesses that use PCs.

The Vietnamese government is working on a new foreign direct investment attraction strategy towards 2030, with a focus on incentive polices to encourage giants in technology towards investment activities. What will Lenovo do to tap into this?

We carry out studies every six months, focusing on the reasons why people buy the way they do, in terms of amounts and brands and other factors. How many people are considering a PC purchase? What do they prefer and why don’t they prefer other brands? So that’s something that we keep consistently asking. This is one of the reasons why we’re able to change strategies and see what is working.

We have an extremely sophisticated supply chain which has multiple factories across the world. And that is another reason why we are able to offer the sort of devices that we offer in a very limited period of time.

We are constantly on the lookout for sites which can ever offer us a competitive advantage. So in that context we will continue to look at potential manufacturing sites across Asia Pacific, including Vietnam, to find out what could be a good place to invest, and which place can scale and expand our supply chain.