Enter The Dragon

A dual brand strategy, coupled with an online-first approach and focus on 4G, has helped lenovo offset its troubles at home and emerge as the largest chinese smartphone vendor in India.

- Aveek Datta

The last fiscal year— 2015-16—wasn’t a particularly happy one for Lenovo, the Chinese consumer technology firm that makes personal computers (PCs), smartphones and server storage devices. The largest PC-maker in the world faced head winds, which culminated in a net loss of $128 million for the year ended March 31, 2016. Its turnover in the same period fell 3 percent to $44.9 billion.

Foremost among its concerns was sliding smartphone sales at home, in China, which is also the largest market for these devices, accounting for one out of three smartphones shipped worldwide; Lenovo’s smartphone sales in China declined by as much as 85 percent in FY16; it had conceded substantial share to rivals like Oppo and Huawei, and was ousted from the list of the top five smartphone vendors in the world.

But where there are clouds, there is also a silver lining.

For Lenovo, that silver lining is India.

The company’s stellar performance in the world’s third largest smartphone market, which is expected to overtake the US as the second largest by 2017, has given Lenovo the conviction that it can rely on India to significantly offset the decline in its home market, thereby improving overall sales and profitability.

Lenovo’s achievements in India are the result of a unique operational strategy, implemented by the company’s local management. The key tenets of this strategy are: Taking a dual-brand approach, which has seen the company focus equally on growing both the Lenovo and Motorola brands (Lenovo acquired Motorola from Google in 2014 for $2.91 billion); a heavy initial focus on online sales channels; and early adoption of 4G-enabled devices in its product portfolio.