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Amid sluggish demand and declining shipments in the Indian personal computer (PC) market, global PC maker HP – which calls India one of its “most-focused” geography– is witnessing robust growth due to demand from the gaming and creator economy.
HP, with a market share of 33.8 per cent in India has maintained its top spot in the PC market since 2016.
India’s PC market, which includes desktops, notebooks, and workstations, declined 30.1 per cent year-on-year to 2.99 million shipments in the first quarter (Q1) of calendar year 2023, according to data from the International Data Corporation (IDC).
Shipments across both commercial and consumer segments saw a sharp decline primarily due to slowing demand, low market sentiment and reduced/delayed procurement by enterprises and SMEs. Government and education were the only segments to see growth in Q1, said IDC.
Vikram Bedi, Senior Director (personal Systems), HP India seems to be unperturbed with a slow demand in the local market. The numbers show that HP has managed to eat into its competitors market share, with both Dell and Lenovo’s market share dropping in CY2022.
“India is one of the most focused markets for HP globally. We have grown exponentially as a company through the pandemic. But there is more growth ahead of us than behind us,” Bedi says. “There are still a lot of unmet needs among consumers that we are working towards. The penetration rates of PCs in India are not the highest in the world. There is still a long way to go,” he shares with Business Standard.
Other than the gaming and creator economy Bedi shares that HP, which has a market leadership in the commercial segment, is seeing government and small and mid-size business (SMB) deals doing well for it. Going forward, the company is betting big on these segments, which, it says, are key drivers of growth.
“We have now managed to achieve break-away leadership in the market, in both consumer and commercial segments,” adds Bedi.
While some government and education orders helped its commercial segment clock a share of 34.7 per cent, strong demand in offline channels helped its consumer segment, as it held a share of 32.6 per cent there.
“Mid-sized business deals, or the SMB segment, is growing fast for us, especially post-pandemic as demand has seen a resurgence. Now, with trends like hybrid work, Indian companies are catching up very quickly with global standards,” Bedi says. The company currently has 10,000 commercial partners.
What has also worked well for HP is the company’s client servicing model, which, Bedi says, puts it ahead of the competition.
“In India, the most value-added services to customers are going to their homes to fix their problems. In line with this, we launched the at-home service model across the country a few years ago, which is laborious and expensive, but adds the most amount of value to our customers,” he says.
Add to this its offline retail footprint. HP, which had 300 exclusive stores in November 2015, has now crossed the 750 mark after the PC maker ramped up its offline retail expansion post-COVID 19. Apart from the exclusive stores, HP also has presence in 4,000 retail outlets in 425 cities.
Gaming boost
On the consumer end, segments like gaming and creator economy have fuelled demand for HP products.
“The demographics of the Indian market are very youth driven,” Bedi says. As such, the company has been increasingly focusing on catering to its growing Gen Z and Gen Alpha audience.
HP, which entered India’s gaming market in February 2017, has grown its market share to 37.5 per cent at 47,298 shipments as of Q1 CY23.
In June 2021, the company announced the completion of its acquisition of HyperX, the gaming division of Kingston Technology Company, in a $425 million deal to ramp up the production of gaming-focused headsets, keyboards, mice, mouse pads, USB microphones, and console accessories.
The company has also further specialized its offline stores to become more gaming-oriented. Earlier this year in February, HP launched its Omen Playground stores, where gamers can play on HP gaming devices and gear – including OMEN, Victus, and Hyper X. Currently, the company has 12 such stores, with plans to open 36 more this year.
“On the consumer side, gaming is doing extremely well. Although the overall PC consumer market has come down post-pandemic, the gaming segment has maintained its momentum and is looking like a potential growth engine for us going forward,” Bedi says.
He adds that the company’s recently launched Playground stores in cities like Bhubaneswar and Ludhiana, Bedi says, have been doing well for the company.
“Gaming is a great equalizer. It is not about where you are from. We are seeing a lot of pull in this segment from smaller towns,” he says.
Commercial competition
The company is, however, likely to face competition in the enterprise space going forward with recent entrants like Apple looking to expand their operations in India. The iPhone maker recently found inroads into the commercial market via a partnership with homegrown IT giant Wipro.
“The industry has been competitive since the start, and we have had this break-away leadership despite having a lot of competition. Our strategy does not change. We understand the enterprise customers extremely well. They have a very different set of requirements, be it in terms of security or management standards,” says Bedi.
Although the iPhone maker had a market share of just 2.4 per cent in CY22, the Cupertino-headquartered firm is now looking to expand its presence in the Indian market. The company recently launched two of its offline retail stores – one in Mumbai’s BKC and the other in Delhi’s Saket – and is also looking to boost manufacturing in India.
“India, as a market, has become very lucrative post-pandemic. Our fundamental belief is that competition is really good for customers and for us,” Bedi adds.
Manufacturing boost
HP, like many others, is also looking to expand its manufacturing capabilities in India. Currently, the company has manufacturing operations at contract electronics manufacturer Flex Ltd’s facility at Sriperumbudur near Chennai, Tamil Nadu – the capacity of which Bedi did not disclose. Here, the company manufactures laptops, desktops, notebooks and workstations for the Indian market.
“We have been manufacturing in India for quite a while now. Most of our portfolio is getting manufactured through our Chennai unit and we are looking to expand it as we go,” Bedi says.
The firm is also in talks with the government to boost its manufacturing output in line with the Centre’s IT Hardware PLI Scheme 2.0, which has a budgetary outlay of Rs 17,000 crore.
“We are deepening our manufacturing in India and are in discussions with the government to see how we can add more value to our customers,” Bedi adds.
Future focus areas
Going forward, in the commercial segment, the company will focus on catering to yet undigitized SMEs while looking to offer peripheral services to its established enterprise partners. On the consumer end, Bedi says, HP will also focus on bringing “net new IT households who have never used a PC before” into the HP fold.
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