Stellar growth in PC market woos more brands3 min read . Updated: 11 Jan 2021, 06:32 AM IST
- Both Nokia and Vaio chose to take the online path as a quick way to reach customers, counting on their brand recall to challenge established companies
Surging demand for laptops as people work and study remotely has prompted Nokia and Vaio to start selling the device in India, seeking a foothold in the growing market.
Both Nokia and Vaio chose to take the online path as a quick way to reach customers, counting on their brand recall to challenge established companies.
Nokia is selling its laptops exclusively through Flipkart as part of a licensee partnership with India’s leading e-tailer, which had previously sold Nokia TVs and Nokia Media Streamer.
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Meanwhile, Hong Kong-based Nexstgo Co. Ltd will sell the Vaio brand of laptops on Flipkart. Nexstgo had acquired the manufacturing and sales rights from Japan’s Vaio Corp.
“To go for a full-fledged offline presence, you need a lot of investment, a distribution network and solid retail presence. That takes time. Selling online is a lot easier. You just have to partner with an e-commerce store and then it is their headache how they go to market," said Jaipal Singh, associate research manager, client devices, IDC India.
Singh has a point. Most newcomers, such as Xiaomi and Honor, have been selling laptops through online channels. “This would give them a foothold in the industry. But people who are buying their first PC are more likely to go to a store, and that will hinder the opportunity for these new brands," said Ranjit Atwal, senior research director, Gartner.
What works in favour of Nokia and Vaio is their brand name. Both are quite well-known among Indian consumers, unlike other newcomers such as Avita. “If you are coming with a new brand, you need to invest a lot in creating awareness and loyalty for it," said Singh.
The pandemic has led to a surge in computer sales. According to IDC, India shipped 3.4 million PCs in the September quarter, a 9.2% growth from a year ago and the best quarterly performance in seven years. Sales of consumer PCs, which accounted for most of the demand with 2 million shipments, grew 41.7% from a year ago and 167% sequentially.
New brands may also gain from the government’s plan to extend the production-linked incentive (PLI) scheme to the PC industry.
“Diversification of the supply chain is important going forward. However, when you start diversifying, you are adding costs. But if there is support from the government to come and build, it does become more appealing to companies," said Atwal.
The entry of more brands also widens options for buyers. Industry experts feel established brands such as HP, Dell, Lenovo, Asus and Acer may not have much to worry though many have stepped up discounts and offers on products sold through online channels.
The first Nokia laptop starts at less than ₹60,000, while Vaio plans to launch products across price ranges.
“Vaio is coming to India with a versatile lineup of products that cater to every strata of the population," a company spokesperson said.
Meanwhile, a supply crisis has become a key concern for the PC industry, more so for new brands. Strong demand for PCs and a shortage of semiconductors and other parts has impacted even established brands. Singh said that “existing brands have stronger connections with partners and control over the supply chain than new brands."
The pandemic has forced changes in the education sector, with both teachers and students quickly becoming well-versed in online learning, he said.
For companies, the pricing of laptops will be key, and the entry of new brands may trigger a price war.
“With more competitors, pricing is obviously a way to differentiate. However, companies are realizing that margins are really important, and sales just won’t go up by reducing prices," said Atwal.