The world’s largest PC maker expects at least 30% jump in India revenue despite selling fewer laptops

• Lenovo India is targeting a yearly growth of at least 30% this financial year despite the economic slowdown.
• Rahul Agarwal, CEO of Lenovo India, told Business Insider that the slowdown has only resulted in a minor dip in its consumer business while the company’s commercial business continues to grow.
• Lenovo is expanding its portfolio beyond PCs with IoT and smart devices to help it grow even has the PC stagnates.

Unlike many other companies in India, the world’s largest PC maker — Lenovo — is eyeing 30-40% revenue growth this financial year.

The company which has an enterprise and a consumer business, has two different stories to tell.

Its commercial market is growing at a healthy double digit rate, while its consumer business however has shown a minor contraction of 3-4%. This too, is not a result of the ongoing slowdown in India.

"It’s too early to draw a large trend. Because if I look at the last 5-6 years, the market has been fairly stagnant, so if there’s a minus -2% or -3% — that happened four years ago as well," Lenovo India’s CEO and Managing Director, Rahul Agarwal, told Business Insider India.

Upgrade cycle

The real challenge they face is not lack of interest but that any movement they see in the laptop market is purely a replacement of devices. It means the market is not gaining any new consumers.

"The people who are spending, let's say ₹40,000 rupees, their life cannot be without a laptop. Once you get used to a laptop, then in another 4-5 years, you will need a new laptop," he explains.

"The challenge in the PC market is that the growth is happening on the revenue front, which means people are spending more and more money buying the same number of laptops," says Agarwal.

In these circumstances, Lenovo has a two-pronged strategy for fast growth. The first part of Lenovo’s plan to grow its revenue is maintaining its traditional stronghold, which includes its consumer and enterprise business, large government deals and SMB businesses.

At the same time, it is also planning to expand into new categories.

Beating the slowdown

According to him, the slowdown is primarily focused on rural India and the demand for PC’s in that segment is fairly low since the company’s consumers are mostly located in the urban and semi-urban areas.

"So, I wouldn’t call it (the drop in consumer demand) a major trend," says Agarwal.

Yet, from here on, Lenovo is eyeing growth across these segments and more. The first part of Lenovo’s plan to grow its revenue is maintaining its traditional stronghold, which includes its consumer and enterprise business, large government deals and SMB businesses.

At the same time, it is also planning to expand into new categories.

Beyond the PC market

Yesterday, Lenovo announced its foray into commercial Internet of Things (IoT) and security solutions. The ThinkSmart Hub, for instance, is an all-in-one purpose built device to simply video conferencing.

Previously, the company launched consumer-facing smart products like clocks and home assistants focused on providing a video interface.

Lenovo is also expanding its service portfolio simultaneously to better serve its clients. The company is now offering stand-by laptops to consumers that submit their devices to be fixed. It’s also providing round the clock service to better serve its customers.

"There are two or three streams which are really helping us grow despite things not looking so great," explains Agarwal.

Lenovo hopes these new-age businesses will help it thrive in a market where the PC market is shrinking, and slowdown is taking over.