Business - Dell making inroads in India

Prasad Sangameshwaran

In India, however, Dell seems to not be going all out to chase market share, rather doing it in what seems like a phased manner. In this market, Dell
has set its sights on an audience of small business owners. The size of the market in India is estimated at 8 million businesses, but only 13% of them currently use IT to make their businesses more efficient. Also, Dell can do a lot better in this segment with a current market share that’s in the range of a measly 3%. “We believe that we can absolutely do better than that,” says Jarvis.

With that in mind, Dell has recently launched a campaign that showcases individual achievements by Indian entrepreneurs that was made possible because of that extra fillip from technology. To add that glam-touch to technology, the entrepreneurs featured in the “Make your own path” campaign include filmmakers, bridal wear specialists, style-gurus and so on. But it might take Dell more effort than this campaign to make its own path. After all, the company is primarily thought of as a direct marketer. “That’s another interesting brand misconception. Around the world, 17%-18 % of our revenue comes from indirect sales. It’s one of our little secrets in some ways,” says Jarvis. “People didn’t realise how indirect we truly have been,” he adds.

Having said that, he clarifies Dell’s direct model is truly not going away. “It’ll get stronger and stronger for a very different reason . Every year, the direct model allows us to talk with more and more customers than any other technology company. The information that they provide helps us serve them better than any other company.”

That connection with consumers is crucial, even if 84% of Dell’s worldwide revenues come from businesses. “There has been an absolute boom in demand in the consumer personal computing space over the last few years. Obviously we feel we can grow considerable share in that space. Today, there are about 1.5 billion people who are accessing the Internet. In another two-three years another billion people will come online and the only way to do that is with a PC.”

Hold on. Consumers might not go online with just a PC. In markets like India, with mobile phone penetration overtaking PC penetration by an unfair distance, many believe that it’s the handheld device where many consumers will first experience the Internet. Globally, companies like Apple have successfully moved from their PC-maker origins to being recognised as innovative consumer electronics manufacturers. “I have never heard of that company,” Jarvis jokes and then takes potshots . “If that company doubled their share in PCs, it would not have an overall effect on the PC market.” Still, Apple is an image leader. “If you compare the number of Macs bought with the number of PCs bought, it tells you what people want,” continues Jarvis.

But going by Apple’s success in consumer electronics, there seems to be a strong business case to move into other devices than just the PC. “Absolutely,” agrees Jarvis and says, “if you keep watching Dell over the next year you can certainly see interesting products coming. You recently saw the Inspiron Mini 9 laptop. In the UK for example, Dell launched the product with 3G in partnership with telecom services provider Vodafone. Watch this space for more,” exclaims Jarvis.

But the space is already crowded. Not just with fellow PC makers, but also consumer durable companies like Sony who are creating a niche in personal computers with its Vaio range. “We have launched products that can be the envy of every CEO and executive across the world,” says Jarvis and adds, “having said that, we measure our success on how well we compare with our traditional competitors. We have outgrown that market in the first half of the year and we will outgrow the industry in the second half. Customers choose a combination of functionality and looks and Dell’s winning in that.”

Dell’s victory in part can also be attributed to the company’s aggression in the brick and mortar retail space, while its forte has been strong online sales. Jarvis is however confident that it’s in line with changing consumer trends. “In computers there was a time when buying online was the way to buy a computer. Now there is a global boom in consumer electronics retail. We move where the customer wants us to be. But we will always have an online presence and there will always be products that are available exclusively online ,” he says. Dell’s also evolving a click-and-mortar model, right at the retail points. Customers in the US visit retail stores, check out the products and express needs like “more memory” , “need it in a different colour” and so on. “We engaged with retailers to form an agreement where they could go online from the store and help customers order their customized PC. Walk into the store see the goods personalise it and order for it with the help from the salesperson,” Jarvis says. Talk about combining the best of both worlds.