HP bets big on gaming, SMB deals in India amid PC market headwinds
Amid slowing demand and declining shipments in the Indian PC market, global PC maker HP — which counts India as one of its “most focused” geography — is seeing strong growth driven by demand from the gaming economy and creators.
HP, with a market share of 33.8 percent in India, has maintained its number one spot in the PC market since 2016.
India’s computer hardware market, which includes desktops, laptops and workstations, fell 30.1 percent year-on-year to 2.99 million shipments in the first quarter (Q1) of 2023, according to data from the International Data Corporation (IDC).
Shipments across both the commercial and consumer segments witnessed a sharp decline due to slowing demand, low market sentiment and reduced/delayed purchases by corporate and SMEs. Government and education were the only sectors that experienced growth in the first quarter, according to IDC.
Vikram Bedi, Senior Manager (Personal Systems), HP India seems unfazed by slow demand in the home market. The numbers show that HP has managed to eat up market share from its competitors, with Dell and Lenovo both declining in 2022.
“India is one of the most focused markets for HP globally. We’ve grown exponentially as a company during the pandemic. But there’s more growth ahead of us than behind us,” Bedi says. “There is still a lot of unmet need among consumers that we are working on. PC penetration rates in India are not the highest in the world. There is still a long way to go.” business standard.
Beyond the gaming and creator economy, Bedi shares that HP, which has the market leadership in the commercial segment, is seeing government deals and small and medium-sized businesses (SMB) doing well for it. Going forward, the company is betting big on these segments, which, it says, are key drivers of growth.
“We have now been able to achieve market leadership, in both the consumer and commercial sectors,” Bedi adds.
While some government and educational orders helped its commercial segment register a 34.7 percent share, strong demand in offline channels helped the consumer segment, which had a 32.6 percent share there.
“Medium-sized business deals, or the SME segment, are growing rapidly for us, especially in the post-pandemic period where demand has seen a pickup. Now, with trends like hybrid working, Indian companies are catching up very quickly with global standards,” says Bedi. The company currently has 10,000 business partners.
What’s also worked for HP is the company’s customer service model, which, Bede says, puts it ahead of the competition.
“In India, most value-added services for customers go to their homes to fix their problems. In line with this, we launched the home service model across the country a few years ago, which is laborious and expensive, but adds the most value to our customers,” he says.
Add to that its offline retail footprint. HP, which had 300 exclusive stores in November 2015, has crossed the 750 mark after the PC manufacturer boosted expansion in offline retail post COVID 19. Apart from exclusive stores, HP also has a presence in 4,000 retail outlets in 425 cities.
Promote games
On a consumer level, sectors such as gaming and the creator economy have driven demand for HP products.
“The demographics of the Indian market is very youth-driven,” says Bedi. As such, the company is increasingly focused on catering to its growing Gen Z and Gen Alpha audience.
HP, which entered the gaming market in India in February 2017, increased its market share to 37.5 percent at 47,298 shipments as of Q1 2017.
In June 2021, the company announced the completion of its acquisition of HyperX, the gaming division of Kingston Technology Company, in a $425 million deal to ramp up production of headsets, keyboards, mice, mouse pads, USB mics, and gaming-focused toys. console accessories.
The company has also specialized its offline stores to become more game-oriented. Earlier this year in February, HP launched its Omen Playground stores, where gamers can play on HP gaming hardware and gear — including OMEN, Victus, and Hyper X. Currently, the company has 12 such stores, with plans to open 36 more stores this year.
“On the consumer side, gaming is doing very well. Although the overall consumer market for PCs has declined post-pandemic, the gaming sector has maintained its momentum and seems to be a potential growth engine for us in the future,” says Bede.
He adds that the company’s recently launched Playground stores in cities like Bhubaneswar and Ludhiana, says Bedi, have been doing well for the company.
“Play is a great equalizer. It doesn’t matter where you’re from. We’re seeing a lot of traction in this part of small towns,” he says.
commercial competition
However, the company is likely to face enterprise competition going forward with new entrants such as Apple looking to expand their operations in India. The iPhone maker recently found inroads in the commercial market through a partnership with local IT giant Wipro.
“The industry has been competitive from the start, and we’ve had this detached leadership even though there’s a lot of competition. Our strategy doesn’t change. We understand enterprise customers very well. They have a very different set of requirements, whether it’s in terms of security standards or management,” says Bede. “.
Although the iPhone maker had just 2.4 percent market share in 2018, the Cupertino-based company is now looking to expand its presence in the Indian market. The company recently launched two offline retail stores – one in BKC in Mumbai and the other in Saket in Delhi – and is also looking to boost manufacturing in India.
“India, as a market, has become very profitable after the pandemic. Our core belief is that competition is really beneficial for customers and us,” Bedi adds.
Manufacturing promotion
HP, like many others, is also looking to expand its manufacturing capabilities in India. Currently, the company has manufacturing operations at Flex Electronics Ltd.’s manufacturing facility in Sriperumbudur near Chennai, Tamil Nadu – which was not disclosed by Bedi. Here, the company manufactures laptops, desktop computers, netbooks, and workstations for the Indian market.
“We’ve been making in India for a long time now. Most of our portfolio is made by our Chennai unit and we’re looking to expand it as we go,” says Bedi.
The company is also in talks with the government to boost its manufacturing output in line with the centre’s IT hardware PLI 2.0 scheme, which has a budgeted expenditure of Rs 17,000 crore.
“We are deepening industrialization in India and are in discussions with the government to see how we can add more value to our customers,” Bedi adds.
Future focus areas
Going forward, in the commercial sector, the company will focus on catering to the needs of still illegitimate SMEs while looking to provide ancillary services to its institutional partners. For consumers, Bede says, HP will also focus on bringing “net new IT households that have never used a PC” into the HP fold.