Dell to focus on smaller cities for PC growth

Company says sales in tier-III and V is growing 2.5 times faster than tier-I and II cities over the past one year

Personal computer (PC) manufacturing giant Dell is looking at expanding its presence in smaller cities and towns to offset the slump in sales from urban centres. According to the company, sales in tier-3 and tier-4 are growing 2.5 times faster, compared with tier-1 and tier-2 cities over the past year.

Dell is also broad basing its reach to 600+ cities, from the existing 340. Dell India is also planning to increase the number of exclusive stores from 480 to 825 and expanding its distribution to 1200 towns and cities from the current 1,000.

 

P Krishnakumar, vice-president, consumer and small business at Dell India, said he doesn’t consider the popularity of smartphones as a threat to the PC business. Instead, it is complementary since people are migrating to laptops and desktops after getting a taste of computing through smartphones. “People especially in tier-III and -IV cities are moving to PCs with a time lag,” he added.

Krishnakumar said Dell, which recently went private globally, continues to be a strong believer of the PC. “The household penetration in India is below 10 per cent. If we look at data, countries like Brazil, Russia and Sri Lanka are also ahead of us,” he added.  Despite the industry wide stagnation in sales, India continues to be the fastest-growing and the third-largest market for Dell.

According to market research firm IDC, Dell has ranked top in India in terms of shipments and sale of PCs, notebooks and desktops in the October-December quarter of 2014.

Krishnakumar added that according to a recent study conducted by GreyhoundResearch on whether the PC is still relevant found that emerging India or small towns will drive next phase of growth since PC is core to content creation while smartphones or tablets are suitable more for content consumption. The interest is higher especially among young professionals and students. “In line with these trends we are hiring more sales force to cater better to these areas with disproportionate amount of marketing spends being earmarked for these cities,” he added.