After struggling for the last several quarters, laptop brands are currently witnessing healthy movement in the segment. The 'WFH' trend and online classes have been good news.
After witnessing a 'degrowth' for five consecutive quarters, the consumer PC segment in India saw a growth of 4.6 per cent year-on-year in the last quarter of 2019. As per the International Data Corporation (IDC), around 9.5 lakh units were shipped during the period. The laptop sales volume in the country suffered a 'degrowth' in the preceding quarters, forcing players to look at alternative offerings, like gaming, etc. for growth.
The latest IDC report around the segment suggests that the vendors struggled to achieve healthy growth, despite adding more ultra-slim devices with better performance. The first COVID-hit quarter of 2020, which was bad news for most segments and categories, brought some good news for laptop brands in India.
There was a sudden shift to the work-from-home (WFH) model, which was triggered by the COVID-induced lockdown. Another major shift that took place was the transformation of education (schools, colleges, etc.) from offline to online, almost overnight. Classes are now being conducted via video conferencing. These sudden shifts led to a healthy spike in the demand for work-related tools, especially laptops and PCs.
Variations in jobs and related requirements also brought along specific demands from consumers. Anand Subramanya, director, product marketing, consumer and small business at Dell Technologies - India, says that while working/studying remotely, people meet virtually on video calls, which requires strong connectivity, long battery life, clear audio input and output with noise cancellation, low range voice detection, etc. Similarly, creators, coders, gamers require larger screens, powerful performance, mobility, and an overall immersive experience.
Lenovo launched its end-to-end bundles (which include devices, accessories, etc.) for seamless usage at home. Lenovo customers are also provided with long-term financing schemes and cashback offers to support purchases. The brand also launched 'PC Pal', a guide for choosing the right PC for various use cases.
Acer came up with customised offers for teachers and students as part of its 'Back to School' campaign targeting the education sector. ASUS collaborated with ed-tech platform Toppr to provide laptop customers a course worth Rs 40,000 at an additional payment of Rs 699. HP even ran digital ads highlighting its light laptops as the “perfect WFH partner.”
The lockdown has also triggered a lot of interest from enterprises looking for a seamless WFH environment for employees, in turn, giving a boost to B2B sales.
"Not only consumers, companies, too, are buying laptops for their employees to ensure smooth work flow. So, B2B sales will stay high in the coming few months. Also, there will be a surge demand from the after-sales service perspective, since the volumes are high in the B2B segment," says Arnold Su, business head, consumer and gaming PC, system business group, ASUS India.
The situation is similar at Acer and Lenovo. Acer enabled GST invoicing on its e-store for enterprises looking at purchases. The brand also launched its mini affordable desktops to cater to e-learning, SMB, and enterprises demand.
Players are also expecting a spike in laptop rentals with enterprises looking at saving costs in IT infrastructure. "Renting laptops are becoming popular, and we may see an increase in rentals as we move into the 'new normal'. 20-25 per cent of the customers, especially from large companies, may choose this model, and Lenovo sees this as an opportunity," says Amit Doshi, CMO, Lenovo India.
On a similar note, Acer launched its DaaS (Device as a service) model aimed at organisations and businesses. The DaaS model provides an option of leasing out devices.
Meanwhile, with consumers cut off from offline stores, brands are foolproofing their e-stores. Acer has been putting its muscle behind easy payment options, along with fast, hassle-free, and contact-less home deliveries. While there is steady demand, distribution, replenishing stocks and deliveries could be a serious roadblock.
Other players, too, are pursuing a strong omnichannel approach. But is it enough?
Anand Murthy, strategy head at Taproot Dentsu, suggests that laptop brands also need to look at a full set of experiences for the customer. For instance, resources and tools to do minor repairs/updates/service requests sitting at home; enabling customers to understand the specs that will best suit their needs, and the ability to make quick, seamless purchases. Players are gradually opening up their stores as the lockdown eases, with hygiene kits and strict SOPs for maintaining zero contact and social distancing norms.
However, will the growth sustain?
To Murthy, WFH looks like a model more organisations will stick with, even after the pandemic subsides, "given the cost benefits and efficiencies this promises." Other emerging trends from Murthy's POV include consumers seeking better performing machines, and families realising the need for more devices for individual members.
Chandrahas Panigrahi, consumer business head and CMO at Acer, maintains that the demand for laptops and PCs will remain high even after the lockdown is lifted. “This is owing to the need for social distancing, and also since people are continuing to stay active digitally,” he adds.
ASUS has already recovered more than 100 per cent of its sales in the post lockdown phase, and also sees the demand going higher. "The pickup pace has been phenomenal, as more and more professionals are working from home. And, even educational institutions have adopted an online methodology, which has triggered a very high demand of thin and light laptops," Su says.
Despite the spike, Lenovo's Doshi finds it difficult to make long-term forecasts. "We have to wait and watch how the situation pans out, as companies will need to balance financial and cost pressures against the length of the asset replacement cycle," he signs off.