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Dec, 07 2010

COMPUTING PROFITS

India is one of the fastest growing markets for Lenovo worldwide and the brand is bullish on increasing its market share and profitability. It aims to offer the right product mix at competitive prices and supplement it with innovative and engaging promoti

What led to the change in Lenovo's retail strategy of moving from MBOs to EBOs?

Lenovo Multi-Brand (LMB) outlets represent a key sale growth engine for us in India. Currently, we have more than 225 MBOs across India and plan to expand to 300 by the end of FY 2010-11. We have fine-tuned our retail strategy, depending on prevailing market conditions. While we will continue to focus on expanding our retail presence in LMBs, we will aggressively expand our footprint through Lenovo Exclusive Stores (LES) across the country. From our existing 122 LES, we plan to expand to 200 by the end of FY 2010-11.

What are the benefits of operating through EBOs? Why do you plan to franchise your EBOs?

Both kind of retail formats offer distinct benefits, one will not necessarily replace the other. At Lenovo, we have put in place a clear strategy to demarcate where we will open LES and LMBs, respectively. Our end objective is to connect deeper with our customers through a multi-pronged retail approach. Franchising our EBOs will bring about higher cost-effectiveness in our distribution.

What are your expansion plans?

We are focusing on tier II and III markets like Coimbatore, Hubli, Nagpur, Vizag, Chandigarh, Indore, Raipur, Surat, etc. Our existing 122 LES stores will be refreshed and we will improve our share of wallet with multi-branded outlets and regional distributors.

What are your franchise requirements?

We would invest in a store located in an area that is easily accessible. We prefer franchisees with a credible amount of expertise, prior experience, commitment to business and brand.

What kind of training and support a franchisee will get while partnering with you?

Lenovo follows a regular calendar and imparts training in sales, floor sales and soft skills to franchisees. A clear roadmap of product cycle always helps franchisees plan their inventory better. Hence, we invest in professional training agencies to provide sustained training on a quarterly basis in order to train them to manage POS and POP materials more efficiently. We also have a dynamic tele-sales team to help address partner queries and robust support for selling material such as brochures, leaflets, etc.

Tell us about your added focus on after-sales service.

India, as a market, is very similar to China. Lenovo's highly successful business model has paved way to establish the company as the largest selling personal computer (PC) maker in China, with 30 percent of the market share. Following on the heels of our China model, in India, too, we sell to distributors, who sell to retailers and then it reaches customers. At every step, they are closely associated with inventory and post-sales service, which is very important.

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