PC business in India to reach US$500 million by 2000-02 says IDC.
Assemblers grab lion's share of home PC segment
All the full-blown ads and commercials in the media not withstanding, major computer manufacturers like HCL, Compaq, Zenith and PCL were nowhere near the 'assemblers' in selling PCs to the fastest growing Indian home PC market last year.
A survey by International Data Corporation (India) Limited (IDC) has revealed that none of the branded PC manufacturer has touched even 10 percent of the home PC marketshare during 1997-98. The closest was HCL, the number one PC-seller, who managed market-share of 9.4 percent, Compaq, at a remote 3.8 percent, was the nearest rival.
However, the so-called' assemblers', who have now received industry recognition in the form of a tag: 'Genuine Intel Dealers' (GIDs), have marched ahead with a whopping 77.5 percent for the home PC segment. A total of 65,000 PCs were bought by the home segment last year, IDC India said.
Zenith, with all its 'MNC Brands at Local Price' bitzkriegs, settled only at 3.4 percent, a dramatic comeback for a company which was nowhere in the home PC scene during 1996-97. The combined sale by other branded companies were at 4.5 percent.
The size and growth of the home PC market is all set to grow at a 'realistic' pace of 57 percent, says IDC India. By 2000-01, Indian home will by buying close to 3.98 lakh PCs. For the year 1998-99, the projection is 1.66 lakh PCs.
Home PC business is no longer small. The home PC market in India is expected to reach a market size of Rs. 1,880 crore by 2000-01. It is all set to reach 680 crore during the current fiscal. This list includes PCs, PC upgrades, printers, CD titles, Internet connection, modems, etc.
India has one of the lowest PC penetrations per person today. Other motives behind escalating PC sales in India include 'child education' and the comfort of 'working at home'. Moreover, Intel's seeding' of home market in close association with major brands is seen as another factor.
According to the survey, the first 10 big cities accounted for 80 percent of the installed home PCs. While non-buyers still remain at 64.8 percent, PC owners have swelled to 16.5 percent. First time buyers are 18.7 percent.
For the first-time buyers, the reason for buying a PC is no arcade games. Fifty-six percent of home PC buyers bought a PC for job-related or home business task; 51 percent bought for children's schoolwork and to make their kids computer-savvy. Entertainment and games come in third, at 38 percent.
Even though the primary reason for buying a PC is not entertainment or games, most PC households use it for this purpose, the survey says. Almost 73 percent of PC usage is for playing games or watching a VCD (Video CD).
Intel, which as boosted home PC sale last year by trying up with assemblers for the first time, has spent nearly Rs. 500 per PC for promotion. Intel's total promotional budget on TV and print ads and melas comes to Rs. 5 crore.
What turns PC buyers away are factors like high price as against low disposable income; lack of perceived notion by most non-buyers; poor Internet and telephone connection at high cost. The unexplored local language market has also come in the way of the home PC market.
To overcome non-PC buyers' reluctance, IDC has recommended adding value to the PC: like training, free set-up, bundling of software, packing with CD titles, etc.
Excerpted from Business Standard, 16 July 1998
ciol.com
From DATAQUEST-India
The P's of PC success
The Indian PC industry is at a two-pronged crossroads. On one prong is the take-off point, when the numbers will hit the million mark, sooner than anybody imagines. On the other is the normal growth rate of 10-15%, which wouldn't change the landscape much. The demand is there. Is the supply ready to take the demand by its horns? That is what the vendors have to decide. Which route to take is clearly decided by price, which is at the crucial juncture of Rs 30,000. The price point of Rs 30,000 is the viagara that can provide the PC industry the power to impregnate millions of units into the receptacles-homes, offices, and different user segments. And, most important, this price has the ability to open up newer market segments.....
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