Dell Goes Rural With A Vengeance
Computer-maker Dell is jumping at the latent
opportunity in a spectacularly underpenetrated PC market that's set to become
its growth engine.
The school `Computer Lab'
equipped with assembled PCs complete with MS DOS and Paint, was where most
people born in the 80s had their first computer experience.
The lab remains, to this
day, where large swathes of young Indians from smaller cities and towns have
their first noteworthy encounter with the Personal Computer. Even if it's 10:1,
person to computer.
In a recent study by
computer technology major, Dell, over 78% of young people in India's Tier 4
cities use PCs for school work.
The PC is a primary gateway
to technology-enabled lives.
Meanwhile, 68% of their
Tier 1 city counterparts use PCs primarily for gaming, from Warcraft to Angry
Birds. But when they're not catapulting birds with anger management issues at
buildings, their opposable thumps are preoccupied with sending Snapchats from
high-functioning smartphones or more gaming on tablets.
Meanwhile, India's PC
penetration is a mere 9%, according to a study by MAIT and KPMG.
Dell did the math. To
nurture a grossly underpenetrated market, the $60 billion global enterprise has
been initiating and sustaining marketing outreach programs with a special focus
on Tier 3 to 5 towns. Underserved markets will help drive India, already a top
ten market, to a $3 billion market for Dell.
In a recent interview with ET, Dell's finance
chief Tom Sweet said, “We see tremendous opportunities to keep growing -India
went from not being in the top 10 markets for Dell to now being No.3. India
grew 30% last year for Dell, which is fantastic. We think that it can continue to
grow at a healthy pace, so our investments will be in line with that.“
Back to school, literally.
Dell is hitting the
countryside with a vengeance. A few months ago, the company opened an exclusive
store in a place called Hapur, the district headquarter of Panchsheel Nagar in
western UP. The town, well known for a concentration of paper cone factories,
has a population of just about 3 lakh. However, Hapur is an emerging education
hub with 15 colleges in areas of medicine, engineering and law.
Says Ritu Gupta, director,
marketing, Dell India, “Dell as company has been focused on enabling or
empowering the youth to increase their capacity to learn through the use of
technology.
This made Hapur a natural
choice for expanding our physical store presence as it provides great potential
for technology adoption and creating greater awareness of the brand among the
growing college student populations and industries.“ And Hapur is by no means
the last. By year-end Dell plans to take its exclusive stores from the current 600
to 825 stores across 600 cities and towns. Tier 3 to 5 markets is where future
growth for technology will come from and where Dell has been heavily driving
technology adoption.
In fact, in just a year
the company's presence in tier 3 to 5 towns has grown from 180 towns to 400.
Brand presence is reinforced with below the line marketing efforts like `Dell
Champs', an annual online quiz that reaches 400 schools over 6-7 months. The
winning student-parent team gets a brand new PC station installed at home and
for the triumphant school, a computer lab fully furnished by Dell.
Taking a leaf out of
Maruti's marketing playbook, with the `Go Rural' program in partnership with
Intel, the company reaches first-time buyers in 190 district headquarters
through mobile stores. Says Gupta, “People don't feel comfortable walking into
stores and asking questions because they don't know what to ask. So they stay
away. Also, they fear they'll be compelled or forced to make a purchase. So, we
take the store to them.
“ On neutral ground, no
judgement, no pressure, new buyers are more at ease. Of course, there's no
compulsion to buy. Says Gupta, “they may or may not purchase a Dell PC
eventually. But the objective of Go Rural is achieved.
“ Sales from areas covered
under the Go Rural initiative has seen an upswing in recent months. And share
of business contributed by Dell exclusive stores in tier 3 to 5 cities has
grown to 30-35%. So, we suppose, the man from Hapur did go with Dell, after
all.
The More The Merrier
As Digital India swings
into action, brands like Dell, albeit not at the same space, are laying the
groundwork by nurturing a market of millions of empowered,
digitally-predisposed consumers.
This year,
Beijing-headquartered Lenovo launched a volunteer program `Pitch to Her' in
association with YUWA, a social development platform for young women in
Jharkhand.
It has extended an
invitation to India “to hack real world issues with technology and propose
interesting ideas of change.“ As part of the program, Lenovo has a full-fledged
team and lab, equipped with the Ashton Kutcher-endorsed Yoga computers and
tablets, operating in the town of Hutup, so young women can experience and
learn about computers, internet and science.
Also, through its `Start
up with Lenovo' scheme the company is offering PCs and laptops on interest-free
EMI to drive adoption and get the PC penetration number of 9-10% moving
northward.
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By Delshad Irani
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ET14OCT15
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