Lenovo To Open 1000 Store


5 Aug 2011
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Lenovo India has already set up 650 exclusive stores and is on its way to crossing the figure of 1,000 exclusive retail outlets by the end of Q12012. The company has also unveiled a series of initiatives to ensure that these retail stores achieve profitability.

“Our retail story, consisting of Lenovo Exclusive Stores (LES) and LESlites, has been successful. We have managed to roll out 650 stores across the country and will launch at least another 350 by the end of this financial year,” informed Rajesh Thadani, Director, Consumer Business Unit, HSB Lenovo India.

While other PC vendors have been less focused on exclusive retail stores and are more keen to expand their base around non-exclusive stores and LFRs, Thadani said that the Lenovo strategy is working because of careful retail planning. “Like other retail-focused companies, we’re also using reports from GFK Mode. But we go beyond as our regional teams are very careful before assigning an outlet and setting targets for an outlet. Our goal is to see that every retail outlet makes enough money to sustain itself.”

According to Thadani, the profitability of partners has been the key focus across the distribution chain, and the Chinese PC maker has consolidated the number of regional distributors (RDs) from over 60 last year to 42 now. “From a general national policy on regional distribution, we now have a more direct agenda with individual RDs, providing either territorial or product or channel exclusivity depending on the state and territory.”

He said that Lenovo’s schemes have been revamped to ensure profitability. “I would say that 70-80 percent of our stores can break even if they sell 75 units a quarter. The feedback is that most stores are breaking even within six months.” The contribution from exclusive stores has also gone up. “A year or two ago exclusive retail stores accounted for less than 20 percent of our consumer business revenue. Today, that’s close to 50 percent, the rest being accounted for by non-exclusive stores, resellers and LFRs. By March 2012 we expect a much higher contribution from exclusive stores.”

Thadani’s biggest bet remains on regular product roll-outs. “We were absent from several product categories such as low-end notebooks and desktops, high-end notebooks and some very specific SKUs. In fact for long we have been offering ThinkPads to make up for the gaps in our product line. We are now beefing up the IdeaPad U series to offer notebooks in the `50,000+ price range.”

On the desktop front, Lenovo is expecting the AIO category to do well. “We are the largest AIO vendor in the world,” stated Thadani. “In India too home PC consumers are buying AIOs, and we expect this trend to continue.”

Meanwhile, the company has launched new tablets under the IdeaPad and ThinkPad brands.

source : crn
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