Lenovo banking on India despite fall in market share, headwinds at home

It managed to increase sales of smartphones in 2015 by 89% and captured 11.6% market share in Dec

Lenovo is banking on India for the next leg of growth as it faces headwinds at home in China.

The Chinese hardware manufacturer would expand its footprint in India this year, said Aymar de Lencquesaing, senior vice-president, Lenovo Group.

Lenovo India managed to increase sales of its smartphones in 2015 by 89 per cent and captured 11.6 per cent market share in December. It also moved up to third position in a crowded market that offers some 160 brands of mobile handsets.

Lenovo's smartphone market share in India, however, slipped to 8.2 per cent during January-March 2016 as shipments declined 35.8 per cent, according to International Data Corporation (IDC). Sales of its sub-Rs 10,000 handsets took a hit in 2016, but Lenovo's 4G smartphones continued to lead peers in India along with Samsung and Reliance Jio, IDC observed.

Lenovo lost a spot among the top six players globally as well in the January-March 2016 quarter.

Falling sales in China due to withdrawal of subsidies by telecom operators played spoilsport.

"We have been working closely with telecom companies in China. But according to government policy, they stopped subsidising smartphones, which changed things for us," De Lencquesaing said.

With the latest developments in China, Lenovo has increased its focus on markets like India, Brazil and North America.

The company has a 23 per cent share of Brazil's smartphone market and sales in Canada have also picked up recently.

"As long as we grow faster than the industry growth rate we are satisfied," De Lencquesaing said.

The company is betting on all price segments to increase sales in India. After reshuffling brands under Vibe and Moto earlier this year, Lenovo is working on value-added services like cloud data space, utility services, and mobile applications.

Lenovo plans to partner service providers and app developers for such offerings because its focus remains on hardware manufacturing, innovation and connected devices.