“India is one of the key growth geographies for Acer”

In an exclusive interaction with The DQ Channels, Mr. Oliver Ahrens, Sr. Corporate Vice-President & President Pan Asia Pacific Business Operations, Acer Inc. shared his vision to escalate Acer business in the Asia Pacific region.

Since your new role, what are the key market strategies you have brought into force to escalate business in the Asia Pacific region?

Oliver Ahrens: The PAP (Pan Asia Pacific) is a very diverse region. It stretches from some of the most mature markets such as Australia and Japan to developing markets such as India and Indonesia. Each market needs to be addressed differently. What works in China does not necessarily work for India. The Indian consumer has always exhibited a dual behavior when it comes to selection of products. He/she has the western taste for well-designed products, high performance, premium brands (such as BMW) etc. but an oriental requirement of Value for Money and affordable pricing. Having experience in managing both EMEA and China markets, I feel I bring to the table the best practices from different geographies.

Further you will see that we are aligning end-to-end strategies on Marketing, Retail Management and Product Portfolio more intensively. Means India will gain support by special marketing programs and products made for demands of the Asian markets.

How critical is India for the overall growth of Acer’s business in the Asia Pacific region?

Oliver Ahrens: We count India as one of our most critical markets globally. Even though I cannot reveal numbers, I can assure you that India’s potential is huge in the global purview. Be it in terms of marketing, or sales, India is one of the key growth geographies for us. In South-East Asia, India has been the leading geography for growth and has always deserved more focus.

We consider India as one of the high priority countries when we think about our business, because that's where future lies. The market here in India is vibrant, growing incredibly quickly and we believe that India is a great match to our products and product strategy.

India is doing very well in the education, government and very large Business segments while we have to catch up in SMB, small office and consumer segments. For last two, we are too weak, especially in Mobile PC, painful because it is nearly 60% of the market (2014 Consumer + Small Office Total PC IDC). That’s one main reason why we defined India as one of our focus markets for consumer business development.

What are the key growth areas you have identified in the emerging economies like India? What are the key growth challenges you see in the Indian market?

Oliver Ahrens: India is a diverse country with diverse technology needs and usage patterns. In terms of opportunities, computing itself is an underpenetrated market in India and moving forward, we will expect to see increased adoption of computing devices, both conventional and new form factors. This combined with a stable government and a favorable economic policy roadmap should see a high growth in the consumer segment.

Smartphones have already established themselves as a fast growing market and it is expected to continue this growth. New form factors such as 2 in 1s, AIOs etc. are being used for both creation and consumption and will soon become mainstream devices. Wearables are still in nascent stages even in mature global markets and it will be a while before they become mainstream devices as part of IoT environments. Tablet buyers are now mature and the prospects look exciting for both consumer and commercial segment.

In terms of challenges, there are some integral challenges that the Indian electronics industry is facing today. A huge facilitator will be the implementation of the promise of ease of doing business. Another significant challenge is the cost of finance, especially working capital. Capital is scarce to come by in India, and the cost of borrowing is very high, as compared to some other countries where electronics is flourishing. Another challenge is hard infrastructure, such as power, water, roads, etc. India will need to make significant and fast investments into infrastructure if domestic manufacturing has to get an impetus, and grow to global scale.

The serious requirements observed above in the path to growth include strong demand for growth friendly ecosystems, more consistent government initiatives, a stable exchange rate, infrastructure enhancements, and so on. But we see since last year, many significant government initiatives and plans picking up pace to change the business environment for the better. Given the strong demand curve for domestic consumption of electronics in India, the opportunity is at our doorsteps.

Acer announced major organizational changes in 2014. How has it impacted the Company’s India business? How was the growth of the company in terms of revenue and market share in 2014? 

Oliver Ahrens: Let’s not talk too much about the past. We are now in 2015 with a strong Acer in India and a new highly effective Business Unit for the Pan Asia Pacific Business. That counts!

One of the results of this for sure is a stronger end-to-end coordination and alignment for our business activities in the region where each function plays it integrated role. This is the modernized version of Acer’s ‘Global Brand Local Touch’ business strategy. Globally Acer has increased the focus on the core PC business again with a well-balanced product portfolio between competitive high volume mainstream products like our Aspire E-Series and selected innovative high-end models like the Aspire R13 or the Aspire Switch 10. In other words the brand stands more than ever to its promise of breaking barriers between people and technology, by introducing the latest and the most innovative technology developments into the market at attractive value propositions.

According to Gartner, Indian PC market is witnessing stagnancy whereas smartphone and tablet segment has seen phenomenal growth. How Acer plans to maintain organic growth in both the segments?

Oliver Ahrens: There is more than enough potential in the Indian PC Market. PC penetration is still low, while purchase intentions are high. Despite several R.I.P declarations, the PC is very much alive. There aren’t alternatives for comprehensive data creation or effective system interaction for education, information, even entertainment purposes. We are expanding our product portfolio into strategic key segments like ultra-flexible 2-in-1 mobile PCs featuring the functionality of tablets and full-fledged Notebook. Further we will phase in more high performance mobile desktop replacements for business, especially for the booming gaming market.

Our first priority in India is to grow our core PC business, especially in SMB and consumer/small office. Besides this, we will focus on Tablets and especially on 7” Phablet products in 2015. Also we do have some new smartphone launches like our new Windows Smartphone targeted to Indian market. The Smartphone market is a highly cluttered space which makes it challenging for all players to stand out. We believe winners are the ones who come out with innovative features. Acer has always introduced innovative features in smartphones such as triple sim, long lasting battery, zero-air gap technology etc. focusing on providing truly reliable products which have a great value for money quotient.

In the next 5 years we expect the Indian PC market to be more matured. This should allow us to play to our strengths and be a consistent top 2 players.

It is said that any new device replaces the old technology. Do you think that the growing Smartphone and tablets will replace desktops?

Oliver Ahrens: Phones and tablets have become the primary Internet devices globally. We use the PC only when smaller devices cannot do a particular job. However, the desktop segment in India is still growing, though at a much slower rate than before. We still see good market potential in India, both in the home and enterprise segments. The desktop is gaining momentum in Tier-II and III markets. We see tremendous scope for this category to grow in virgin territories where the first time user base is huge. However, the primary device for content creation still continues to be a PC.

Considering the growing rate of Internet penetration, what are the market strategies of Acer to grab more market share in the PC market in India?

Oliver Ahrens: In the next 5 years we expect the Indian PC market to be more matured. This should allow us to play to our strengths and be a consistent top 2 players.  Our first priority in India is to grow our core PC business, especially in SMB and Consumer / Small Office. Besides this, we will focus on Tablets and especially on 7” Phablet products in 2015. We definitely hope that in the long run, growth in the internet savvy population in the rural and upcountry areas will translates into uptake of electronic gadgets. So in the true sense of the term it is good news for us. Acer is well prepared to tackle demands from the hinterlands as we have already set up one of the biggest distribution networks.

Can you shed some light on Commercial Channels Business (CCB) Unit? What is the objective behind special focus on commercial products business in India?

Oliver Ahrens: Acer is a very strong player in the commercial category especially in the Govt projects, ITeS and BFSI segment. Both our Desktops and Notebooks continue to be preferred choice of device across various organizations even in the SMB segment. The CCB unit was an outcome of the strategic business plan for future. It consists of a dedicated team driving business for incremental growth and to avoid the cannibalization of the consumer channel. It will also promote new form factors such as All-In-One’s in Desktop and convertibles and business tablets in the mobile PC category.

With emerging technologies like Cloud, Mobility, Internet of Things etc. opening up new business avenues for vendors, how Acer looking forward to explore business opportunities coming with the Smart Technologies?

Oliver Ahrens: On a strategic level, we are expanding our business model and scope from purely hardware focused into a provider of Hardware + Software + Services model. This is a great opportunity to give fresh impetus for our commercial business and enable our channel partners to grow with us. This business is definitely in a startup phase right now with first pilot projects launched. We are currently in the initial phase and implementing pilot projects in India, China, Australia, Malaysia and Taiwan within the realm of emerging technologies. Next step is to roll out solutions and application concepts to our channel partners and build up local solution competence. That’s a complex process for a hardware centric company as Acer. To deal with that challenge we will implement a new business model between our central eBusiness Group and the local channel partners. Acer’s eBusiness Group will partner with our local subsidiaries and operate as main stakeholder of the solution business to ensure the necessary support through close end to end cooperation model between application services, national subsidiary and local partners.

Indian market is witnessing fast adoption of Cloud, how will Acer explore growth in this segment in India?

Oliver Ahrens: Cloud services based on Acer Technologies are highly flexible and scalable in scope, extremely secure and user controlled, fully robust and are able to handle some of the heaviest duty processing tasks. We believe that this is a highly attractive value proposition. Core of the Cloud based applications is Acer’s own CSP (Cloud Smart Portal) solution, acting as a role-based control center for steering provision, control, report and billing processes combined with efficient, flexible resource management and pooling. We can say that Acer CSP utilizes the resources of private machines to create virtual “Super Machines” up to demand, which are extremely robust and scale-flexible to deal with massive transactions. We are currently in the initial phase and implementing pilot projects in India, China, Australia, Malaysia and Taiwan within the realm of emerging cloud technologies.

What is your market strategy in terms of product roadmap over the next couple of quarters?

Oliver Ahrens: We are going to continue investing more in user-centric and aesthetically designed products which is our key strength. We will be expanding our product portfolio into strategic key segments such as ultra-flexible 2-in-1 mobile PCs featuring the functionality of tablets and full-fledged Notebooks. Our focus will be in growing our retail presence and make the best of the E-commerce boom which is expected to stabilize over the next few years.