Expanding Horizons in Consumer Electronics

Expanding Horizons in Consumer Electronics
The brand's business plan underscores that over 70 percent of exclusive store expansion should target the non-metro cities.

By Vaishnavi gupta , Sr Correspondent

02 Oct 2023 | 11 min read

In the fast-paced world of technology, where companies rise and fall with every passing trend, Acer India stands as a testament to resilience and adaptability. For over two decades, Acer has not only weathered the storms of the tech industry but has also emerged as a dominant force in the Indian market. From its inception on September 9, 1999, to its current position as the number one brand in the PC segment, desktops, and notebooks, Acer India's journey is one of continuous innovation and customer-centricity.

Acer India recognized early on that the Indian market is unique. With low technology adoption and a demand for cost-effective solutions, the company set out to meet these distinctive needs. “One of the key decisions that set us apart was our commitment to manufacturing. In the year 2000, just a year after our establishment, we opened our manufacturing facility in Pondicherry. Over the years, this facility has grown and diversified, aligning perfectly with the Indian government's "Make in India" initiative,” said Sudhir Goel, Chief Business Officer, Acer India.

The Significance of the Indian Market

Acer India's journey has been marked by a series of successes. In the education sector, both in private and government institutions, Acer has carved a significant niche, boasting a market share of the product segment of a whopping 70 percent. The brand's dedication to providing products that align with India's unique requirements has been pivotal in achieving this feat.

Its commitment to the Indian market extended beyond the education and government sectors. In the late 2000s, the company shifted its focus to the consumer and retail segments. With strategic consolidation efforts from 2007 to 2009, Acer solidified its position in the consumer notebook and desktop segments. More recently, Acer India diversified into consumer electronics, starting with air purifiers.

“In today's global landscape, India's importance cannot be overstated. We have recognized this reality and have invested significantly in the Indian market. With a rapidly growing economy, a youthful population, and increasing tech-savviness, India has become a critical market for Acer and many other global brands,” asserted Goel.

A Complete Suite of Solutions

Today, the brand offers a comprehensive suite of solutions to cater to the diverse needs of both consumers and businesses. The company has a separate entity called Altos, focusing on enterprise solutions, servers, and workstations. In the consumer and commercial client segments, Acer is the go-to brand. Additionally, Acer Pure, with its range of air purifiers and consumer electronics, complements the portfolio.

Acer offers an extensive lineup of laptops and devices, spanning various price bands and catering to specific use cases. “At the foundation of India's consumer market pyramid, we find first-time buyers. These individuals are stepping into the world of technology for the very first time, and their requirements are often straightforward. They seek affordable solutions that can handle basic tasks like web browsing, running small applications, and office work. We have aptly labeled this segment as the "NP" (Newbie/First-time Buyer) segment. Recognizing the limited budget of these consumers, we have designed products that are not only cost-effective but also capable of meeting their essential computing needs,” he explained.

On the opposite end of the spectrum, Acer India has made significant inroads into the gaming market, emerging as a leader for many years. The Indian gaming community has witnessed exponential growth, with a hunger for high-performance devices equipped with top-notch graphics, networking capabilities, and ergonomic design. Its commitment to gaming enthusiasts has resulted in a range of products that cater to this demanding segment.

Building on its success in the consumer segment, the company is poised to expand into the world of consumer electronics. The brand's strategic move began with a year-long test in the air purifier market, gaining valuable insights. In the coming year, Acer India is set to make a significant splash in the TV, washing machine, and water purifier segments.

Expanding Horizons in Consumer Electronics

Blending Online and Offline

A significant shift in consumer behavior has been witnessed in recent years, with a notable acceleration during and after the pandemic. Acer India conducted surveys that revealed a staggering 73 percent increase in digital adoption post-pandemic. This surge signifies a substantial increase in the amount of time people spend on digital platforms for various purposes. Despite the rapid digitalization, it's important to note that 54 percent of consumers still prefer the tangible experience of brick-and-mortar stores for their purchases. This preference highlights the enduring value of physical retail spaces, where customers can interact with products and seek guidance from knowledgeable staff.

Recognizing the diverse needs and preferences of consumers, Acer India has adopted a dual approach. The brand offers a multifaceted approach, encompassing physical brick-and-mortar retail partnerships with renowned names like Croma, Vijay Sales, and Reliance, alongside its network of exclusive brand outlets across the country. Its products are also available through multi-brand outlets, ensuring a comprehensive physical retail presence. Recognizing the importance of the online marketplace, Acer has strategically collaborated with e-commerce giants like Flipkart and Amazon, making its consumer products readily accessible to online shoppers. Acer's own e-store further enriches the shopping experience, offering a vast catalog of solutions tailored to customer preferences.

“Approximately 35-37 percent of our revenue is attributed to online sales, with the remaining balance generated through offline retail channels,” highlighted Goel.

Expansion Plans

By the end of the year, the company plans to operate around 250 exclusive retail stores that exclusively showcase Acer products. Acer India's expansion strategy strategically focuses on Tier II and III cities, rather than Tier I and metro cities. While there may be plans to open additional stores in metropolitan areas, the primary thrust of expansion is directed towards non-metro locations.

“The business plan underscores that over 70 percent of exclusive store expansion should target these non-metro cities. This emphasis stems from the observed surge in demand in Tier II and III cities, where technology adoption is growing as people increasingly rely on digital solutions for both learning and office work, particularly in the post-pandemic landscape. The combination of lower penetration rates and higher aspirations in these regions aligns perfectly with our expansion strategy,” he noted.

Business Growth

In 2022, despite a stagnant Indian IT hardware market in the fourth quarter, showing a mere 0.4 percent year-on-year growth, Acer India managed an impressive 12 percent growth over the entire year, signifying a significant gain in market share. This noteworthy achievement is validated by data from IDC, which indicates that while the PC market faced declines, Acer was the sole brand that demonstrated growth, boasting a market share of approximately 2.5 percent.

Anticipating a resurgence in the consumer segment and witnessing increasing demand, industry surveys suggest that by year-end, the Indian IT hardware market may experience a slight decline of around 2 percent. “We, however, remain optimistic, aiming for a growth rate of more than 10 percent or potentially even higher compared to the previous year,” added Goel.

In the fast-paced world of technology, where companies rise and fall with every passing trend, Acer India stands as a testament to resilience and adaptability. For over two decades, Acer has not only weathered the storms of the tech industry but has also emerged as a dominant force in the Indian market. From its inception on September 9, 1999, to its current position as the number one brand in the PC segment, desktops, and notebooks, Acer India's journey is one of continuous innovation and customer-centricity.

Acer India recognized early on that the Indian market is unique. With low technology adoption and a demand for cost-effective solutions, the company set out to meet these distinctive needs. “One of the key decisions that set us apart was our commitment to manufacturing. In the year 2000, just a year after our establishment, we opened our manufacturing facility in Pondicherry. Over the years, this facility has grown and diversified, aligning perfectly with the Indian government's "Make in India" initiative,” said Sudhir Goel, Chief Business Officer, Acer India.

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