"We have not done enough to grow the PC category in India": Bhaskar Choudhuri, Lenovo India.

Bhaskar Choudhuri, director – marketing at Lenovo, has the best and worst of both worlds. He oversees marketing of smartphones, sales of which are galloping – but he is also responsible for marketing PCs, sales of which declined as a category by over 10 per cent in 2014-15 to 10.6 million units, according to a report by industry body MAIT (together with research agency IMRB). In this frank interview, Choudhuri introspects on why PC sales have declined in such an under-penetrated category and argues that the rise of smartphones cannot do away with the need for PCs.

Edited Excerpts

These are the trickier ones. Increasingly, campaigns are categorised into brand-led campaigns and demand-generation-led campaigns. A lot of the engagement campaigns that we run are actually very strong demand-generation-led campaigns. All our smartphone sales happening on e-commerce sites are actually happening on the back of strong engagement campaigns. We have come to a working model of what drives. And, when you run that, you can judge campaigns on how much traffic they drive, how many people are clicking on the phone, how many are adding it to the cart, how much is the cart abandonment ratio, re-targetting potential; you get a variety of hard core quantitative data.

People make this cosmetic point about investing in digital. But, we took the brave step of starting to dedicate one of our most valuable assets, Ranbir Kapoor, only on digital. This year, 60 per cent of the time he spent on the brand has been only on digital initiatives. So, it is not retailer-promoter dinner meeting or a TVC, but digital interactions and strategies.

Smartphones is galloping as a category with none of the players having to do too much. As opposed to that, PCs, as a category, has been stagnant for the last five years. Interestingly, while it is a stagnant category, India happens to be one of the lowest penetrated countries, compared to other developing countries. A big chunk of the fault lies is ours. We haven't done enough to boost or stimulate the category. We have been in this share-gain game. Bit of the fault also lies with the technology partners we have had. Quantified research data suggests that when PC penetration goes up, there is a definite impact on the GDP of the country and the local economy.

'Start Up With Lenovo' was launched to see what we can do with our available means to pick up the category. We kicked off a pilot in two regions where we have an advantage, and the thought was that if we grow the category, we will get a disproportionate share of the gains. In the two states, AP and Gujarat, the growth rate has bucked the category growth trend and grown faster than the India average.

Yes. Tier II and III penetration would be one-third of the metro penetration for PCs. But for smartphones it is much more. We are also focussing on the lower SEC consumers. It was driven, to a certain extent, by affordability. This category has never enjoyed the benefits of an EMI. One of the things that we have pushed very hard is how I can really drop down the put down price significantly and also not charge an interest cost.

Not at all! The catch terms we use are 'creation' and 'consumption'. Smartphones purely are consumption devices where you consume a lot of data and information. When it comes to creation, especially if you are a student, you will have to rely on laptops. Importance of PC, as a consumption device, is declining; but not as a creation device.

Creation and consumption are not split by age groups, but by human behaviour. You see equal users of smartphones in the 25-40 age group as you would in 15-24.

Psychographically, it is interesting. Globally, we did a study and identified two key segments - design trendsetters and plug and play. Design trend-setters are a subset of early adopters, but are defined as people who pay premium for design and, therefore, look at technology a bit more as an accessory as opposed to just for functional usage. This class of people exists across price points. Plug and play includes the far more value-conscious people who are looking at functional usage.

Demographically, we are equally split between genders, but see a greater skew among younger generation. I would stretch it to 15-30.

Greater sales come from states which are economically a bit stronger, and have better infrastructure and education systems. Things which matter are electricity, internet penetration, mobile telephony, strong service providers and ancillary industries related to IT. The West and South of the country are coming out much stronger because the ecosystem exists for them.

We have design set-ups in three places which carry out foresight study and look at future trends. In technology, to an extent, you have to lead the consumer and be perceptive because he will very rarely articulate what he wants. We do a lot of real-time listening as well (like glitches and complaints during regular software upgrades). While we get a lot of traditional market study research, we also do a lot of campaign evaluations as well as studying insights on first-time buyers. That requires us to travel to tier III and IV towns, spend time in focus groups and a lot of time in consumer homes.

The investment climate has become far more favourable to local manufacturing and the tax structure has become more inviting. However, one of the challenges which we faced, and which is why it took us this long, was that ancillary and technology set-ups that exist take a lot of time to build up. Otherwise, one remains, prima facie, an assembly point.

The big challenge in the technology space is that the consumer decision making journey changes every six months. Smartphone sales were predominantly driven by retail a year back. You had local chains and large-format retail ruling the roost - the Chromas, Mobile Stores etc. The consumer behaviour could be tracked because they would research online and buy offline. Right now, the whole journey is being hosted online. A lot of these buyers are also first-time users of smartphones. So, they aren't expert users who are upgrading or downgrading. The amount of trust you inculcate in them to make the plunge from a feature phone to a smartphone is huge.

But, the laptop category is different. A laptop's interface is not as simple as a smartphone's which is more intuitive. The perception is that if you press the wrong button, something will get damaged and this doesn't give any confidence to a first-time buyer to buy online, without having a touch experience.