Dell is one of the market leaders in overall CDIT consumption of India. The company is determined to accelerate PC penetration, which stands at a little over 10 per cent in India. Having started out with 47 Dell Exclusive Stores (DES) in March 2013, Dell currently boasts of more than 400 DES. In an exclusive conversation, P. Krishnakumar, Executive Director and General Manager – Consumer & Small Business, Dell India highlights further expansion strategy of the brand.
How do you see the consumer durable market growing in India? Also highlight the share of Dell India in it.
Technology is the key enabler for knowledge creation and knowledge sharing, which form the building blocks of a growing economy. In the technology segment, there has been an explosion of superior, innovative solutions for an increasingly technology-savvy audience. Dell sees growth coming from the tier-III to tier-V cities and towns, considering the scope of technology penetration in these emerging cities and towns. Growth in these markets is being driven by the youth in these cities, as they are increasingly gaining awareness of the value of technology and the opportunity it offers towards the fulfilment of their aspirations. Combined with a concerted effort by vendors to enhance awareness and accessibility to technology, we expect the market to grow in the coming quarters. This growth is expected across form factors and types of computing devices depending on usage needs. It is from these initiatives that we have been able to gain the highest annual share growth in the Consumer & Small Business Segment in CY 2014.
Dell is already present in almost every leading marketplace and with local dealers. What is the significance of growing the offline network of its exclusive stores?
Dell is spearheading the wave of technology penetration and PC adoption in the country. In the capacity of a technology provider, we believe in identifying the potential of technology use in relatively untapped markets. This understanding drives us to expand our presence and awareness beyond the limits to tier-I and -II markets. This goes beyond selling technology solutions to our customers. Our objective is to deliver the best technology offering, which changes with the unique requirements of each customer, and to complement it with knowledge and services, which allow users to experience the maximum potential of technology in their everyday lives. The accessibility of a brand across platforms is a determining factor when it comes to fulfilling this role.
Customers today often take the multichannel approach when making a significant purchase decision. They could visit an e-commerce portal to view the choices of devices available to them. This can be followed by a visit to a large format retail store to compare products. They could then visit an exclusive store to attain comprehensive information about their choice of device. The final purchase could be carried out by availing the convenience of an e-commerce platform. As a brand, our intent is to make the Dell experience available at each of these stages, ensuring that our customers are able to reach us wherever they choose.
Dell Exclusive Stores (DES) offer a holistic brand experience, allowing customers to engage not only with our solutions, but also with the brand at large. The immersive in-store experience offers a number of possibilities – exposure to a range of versatile devices for unique user needs, detailed information on product and service offerings, and direct engagement with trained sales staff, who can offer expert recommendations based on individual user needs. The objective of expanding our retail presence is to have the presence of brand Dell across regions. The 400th DES milestone is complemented with an equally robust network of resellers, thereby creating a web of Dell’s retail presence.
As a manufacturer, how do you help your dealers in managing their inventory for old stock? Do you run any sort of discount programme exclusive to your dealers to clear the old stock?
We engage closely with our partners on an ongoing basis to ensure that they get the required support in terms of training and market intelligence, marketing and branding materials. In addition, there are incentive schemes that we run exclusively with our partners to keep them engaged and connected to our brand.
Please highlight your views on the franchising model. Do you think it is a sustainable model for long-term growth?
The Dell Exclusive Store model is one that is franchise led. Aside from several strategic efforts to expand our retail presence, our relationships with franchisees have aided in the acceleration of the growth from only 47 DES in March 2013 to 400 DES as of February 2015. In fact, a number of our exclusive stores constitute resellers who were previously multi-brand outlets, but seeing demand from the market and profitability in promoting Dell solutions, they chose to sell Dell products exclusively.
The franchise-led model offers a win-win situation for the vendor as well as the franchisee. We offer end-to-end product and service training and branding services to the store, in order to implement a consistent planogram for each DES across the country. This is complementary to the on-ground expertise of the franchisee in terms of market understanding in a particular region, along with sales trends and technical understanding of the solutions. This proves to be an effective combination in achieving the end goal of presenting the consumer with the right choices and the right information for their purchase consideration. It is through this model that we see maximum on-ground engagement with not only our products but with the brand as a whole.
How do you see tier-II and -III markets evolving in India in terms of CDIT consumption? Which market has proved more lucrative for you?
As a nation with only a little more than 10 per cent PC penetration, it is the tier-II to tier-V cities and towns which offer maximum opportunity for growth in consumption of technology. With increasing internet penetration, previously unexposed non-users of technology have begun to warm up to the world of opportunities that technology can offer. The segments which have the most immediate need are the youth and budding young professionals with career-led aspirations. These segments are seen to most value the benefits of technology as a whole, especially computing devices, as their primary area of concern is content creation. We have seen tremendous response to the Inspiron line of devices, which cater to this audience specifically for this reason. Our efforts as a brand are inclined towards combining our technological innovation with service offerings, which cater to the unique usage patterns among students and professionals. This includes a variety of initiatives and campaigns such as special offerings during ‘Back to School’ and ‘Back to College’ seasons, warranty options, accessories, and preloaded educational content for students, etc.
Aside from this, the festive season sees a significant surge in purchase, owing to the nature of the Indian buyer who looks at the festive season as an auspicious time to make a new purchase.
As a leader in PC and laptop business, who do you see as your potential competition?
Our one aim at the moment is to make the PC more accessible in the entire country. This is not driven by what the competition is doing. We want to make innovative and intuitive technology offerings as widely accessible as possible, to a growing market like India. Customers have seen value in our offerings and have built long-term relationships with Dell as a ‘Brand of Choice’ instead of one-time transactional equations. It is with this confidence that we have seen in customers that we are forging our way forward and planning for growing further in the Indian market.
Marketplaces vs. exclusive stores – can you separately highlight your revenue share?
We do not break up our revenues by routes to market, but we can share that it is with the support of both our channel and retail networks that we have been able to show sequential growth over the last 8 quarters. We have had the highest ever share gain for the Dell India Consumer business in 2014, as per IDC.
Please highlight your growth plans and a tentative turnover projection for FY 14–15.
We have seen sequential quarter-on-quarter growth over the past eight quarters, having achieved our goals through the implementation of a renewed GTM, a robust retail expansion plan, and innovative and versatile product offerings. This has set the tone for continued focus on growth and expansion in the Indian market in the coming year. Our consumer and small business has shown gains with the momentum going in the positive direction. Throughout 2014, our focus was to steadily establish ourselves as the most preferred PC brand for Indians. For new adopters of PC technology, we want to feature at the top of the consideration set, leading the way in introducing potential technology users to the right solution for their needs.
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