Value is way more important than price in India5 min read . Updated: 06 Aug 2010, 11:05 PM IST
Value is way more important than price in India
Value is way more important than price in India
PC (personal computer) manufacturer Dell Inc. claims it has overtaken competitor Hewlett-Packard Co. (HP) in PC shipments for the second quarter of 2010 (potentially ending the rival’s 21-quarter dominance).
Michael Tatelman, vice-president of global sales and marketing for the company, called India one of Dell’s “fastest growing markets", and launched a retail store-cum-gaming cafe called Alienware Spaceship in Bangalore last month. Alienware is Dell’s premium gaming brand. He also announced the October launch of the Dell Streak, a 5-inch tablet computer similar to Apple’s iPad. Tatelman sees a growing future for India’s “many computing niches", and in an interview spoke on Alienware, Dell’s retail strategy and why their ultra-thin Adamo laptop is like an F1 team. Edited excerpts:
Indian consumers are known to prefer brick-and-mortar stores to online for making purchases. In Dell’s experience, is that true in the categories you operate in?
E-commerce is definitely growing, yes, but in India, we’ve had to go with a multi-channel approach. So, there are a couple of groups we’ve identified. There’s a group of folks who are either tech savvy, or looking for replacements—a group that loves customization, colours, patterns and what have you. They buy online, and that group is growing.
Other people want to take something home today. That’s the biggest motivation for in-store purchases—one, you can see the product and two, take it home.
What’s unique to India is that we’ve seen people want to see it, touch it and feel it, and then buy it online. So, we have a system where you can go into the store, configure it online with the staff’s help and have it shipped home. So, we’ve given people a lot of choices and the feedback is in the market share numbers.
You launched an Alienware store in Bangalore this week. Are these laptops targeted at gamers, or at creative professionals—like Apple’s high-end laptops?
Is this both for laptops and desktop computers?
This is both in laptops and desktops, though Alienware has always had a stronger desktop market (just to be clear, the laptop business is the one that’s growing faster in India).
For ultimate scale, and engineering and customtization—you can’t beat a desktop. They’re designed to be opened easily, with all the components perfectly laid out, so you whip out stuff, put it back in.
On the other end of the price spectrum, how well have netbooks worked for you?
I think we’re No. 1 in netbook share in India—but it’s not for reasons that people think. I want to be pretty forceful, if you will, on how I explain this: Value is way more important than price in India. In our experience in over 300 cities across the country—people want value.
This notion that you can have this cheap computer and the market will get really big, really fast, is not true. There are cheap computers out there, but they don’t provide value.
Instead, we’re focused on very clear value propositions. We’re focused on providing experiences for specific segments and needs.
Could you give me examples?
We’re thinking of students—a high value, low-cost student computer. Then, there might be specific needs of a film student—who needs graphics, or an engineering student—who needs a different screen resolution or processing capabilities.
Even families. Every mom who buys a PC for her family wants a level of protection in their computer. Protection from predators on the Internet, from malware, protection for their photos and notes, a different level of support.
We make sure they have that. Again, the notion that people want a cheap box—that’s not true. It’s certainly not what they expect from us, especially in a market when a high per cent of disposable income goes into this product.
The use case for what that purchase is for—I bought it for my family, my education, small business—we take that really seriously.
You announced that the Dell Streak tablet will be launched in November. What sort of use cases do you have in mind for that?
Tablets are primarily consumption devices. There’s obviously a full range of capabilities on this enabled by the platform—browsing, full resolution, music, video, GPS/mapping, navigation, e-book (I’m currently reading Dan Brown’s The Lost Symbol), corporate email. But the No. 1 killer attribute of this vis-à-vis other tablets—it fits in your shirt pocket. How cool is that?
I think that perfect size is going to be the USP (unique selling proposition) here. I don’t carry a manbag or a briefcase…and yet being able to carry a 5-inch device that can do all that in my pocket—that’s amazing.
So it’s halfway between a smartphone and a netbook?
The press has been trying to shoehorn this thing. Is it a smartphone, is it a portable media player? The answer is simple—It’s a tablet. Let’s be clear.
You can boil down use cases for computing devices into basic human needs—hunt, gather, share.
“Hunt" is the all-day hunt for information, which could be user-generated like taking pictures or video, or content from the Web. Then, its “gather"—put it on storage, either on a desktop or on the tablet, and then “share"—blast it out to friends and family.
These devices are perfect portable consumption devices for these three. Smartphones are too uncomfortable, and laptops I’m not sure I can fit it into my pocket.
You also launched the Adamo laptop recently. Is there a promising market for sleek, high-end laptops like that?
Yes, the Adamo is another high-end niche. A relatively small niche (Alienware is bigger), but if you look at the product portfolio—products like Adamo serve another important purpose.
We invested heavily in a number of scientific disciplines—including material science and industrial design. The Adamo is the epitome of that investment in design. What we manage to achieve there, with the thinness and the engineering, kind of trickles down into our other products. Creating that sort of form factor is what gave us the expertise to attempt a tablet like the Streak.
Similarly, Alienware is about technology—strapping together multiple video processors, CPUs, humongous amounts of memory and power, and cool it down into sleek cases.
They perform as brand builders, and they’re highly influential in creating new products for us.
Think of it as a Formula 1 team—justifying the cost of that may not make sense for an auto company, but the technology you get out of it is incredible.