Bangalore: Having leapfrogged to the third position by unit sales in a rapidly expanding notebook computer market, Acer India Pvt. Ltd now aims to increase sales 50% by the end of this year. The Indian unit of the Taiwan computing company clocked sales of Rs1,200 crore in 2007, a jump of 38% over the previous year, and is targeting Rs1,800 crore revenues this year.
Acer’s third rank in notebook computer sales in India was achieved by the end of the September quarter, which is the latest period for which data is available from research firm Gartner Inc. The company has made a turnaround from being at the fifth and sixth position in the second and first quarters of 2007, respectively, in the notebook market by units sold, beating traditional rivals Dell India Pvt. Ltd and Toshiba India Pvt. Ltd.
Of the 1.12 million notebook computers sold in the three quarters to September last year, Acer accounted for 101,451, trailing the local unit of Hewlett-Packard Co., or HP, which sold 476,673 units, and Lenovo India Pvt. Ltd’s 195,200.
Diptarup Chakraborti, principal research analyst for Gartner’s client computing group, credits this expansion of market share to Acer’s renewed retail strategy and branding in India.
In March, Acer hired popular Bollywood actor Hrithik Roshan as its brand ambassador when rivals Hewlett-Packard India Sales Pvt. Ltd and Lenovo, had movie celebrities Shah Rukh Khan and Saif Ali Khan, respectively, endorsing their products.
“Branding helped Acer lose its negative baggage of being seen as not so superior brand as others (HP, Lenovo and Dell). With a brand ambassador like Hrithik Roshan, Acer started being equated as a reliable and quality brand,” said Chakraborti.
Branding helped sales, agreed W.S. Mukund, managing director of Acer India. “We had a good product line and quality service, but lacked brand recall value, which we have now,” he said.
Encouraged by the results, Acer will increase advertising spending spread over print, television, Internet and film media to Rs70 crore this year from Rs40 crore in 2007.
The company is expanding its retail presence and channel partnership, focusing more on so-called tier II and IV cities, as India’s smaller cities and towns are commonly referred to. Today, it has 250 branded stores (called Acer Malls and Acer Points) in 109 cities, besides tie-ups with nine large format retail chains such as Croma, Metro, Home Solutions and Jumbo Electronics. “This year we will expand to 350 self-branded stores in additional 75 cities. We will also be doubling our resellers from 75 to 150,” said Mukund.
Still, Acer India lags HP and Lenovo when ranked by the number of all computers— both notebooks and desktops —sold last year as it hasn’t been able to make significant sales among business consumers. In the overall personal computer market, HP’s local unit sold 1.03 million computers and Lenovo 483,750 units, while Acer reported 307,640 computer sales in the first three quarters of 2007.
Analysts say Acer’s low presence in the business consumer segment would hamper its efforts to expand market share.
“I do not think Acer can beat Lenovo even by 2010 as Acer is not too strong in the enterprise market. They should get more products for the large enterprise customers,” said Gartner’s Chakraborti.