Acer India Sets Aggressive Growth Target

Acer India has set an aggressive growth target of 42 percent in unit volumes this calendar year. Currently, the company is drawing up fresh plans to go after the D and E class cities.

The markets expect Acer to go aggressively after the large enterprise market, which has so far shown a lukewarm response to the Taiwanese PC maker. But Acer India MD, WS Mukund, indicated that a bigger opportunity exists in smaller towns. “Frankly, we sense a bigger opportunity in both topline and bottomline revenues from the smaller towns, where we do not have an authorized T3 presence. If we have to grow at double the market growth rate, the numbers need to come from these regions.”

To emphasize his point—quoting a market research study commissioned by some of Acer’s OEMs including Intel—WS Mukund said, “The market that’s opening up in the D and E class cities—with population in and around 100,000—indicates a potential Fist Time User (FTU) market that is equal to the market size catered by the country’s largest metros. According to reports, the number homes planning to buy computers over next 12 months equal the total PC market of the large metros,” adds Mukund.

According to Mukund, reaching the 4,000 plus towns mark across the length and breadth of the country is a huge challenge for all PC makers including Acer. “Today we have a recognized partner in around 200 towns, who caters to around 400. We feel we have the best width among all the PC brands. And thanks to the wins in government and education sector, we have set up the widest service network, making us the best brand to reach every nook and corner of the state.”

Mukund is, however, finding it tough to set up a channel plan for partners in smaller towns, and create brand pull for Gateway and Emachines brands there. None of the national distributors have a direct presence beyond the country’s top 100 cities.

“It’s important to establish a connect with partners or potential partners in these 4,000 towns,” opined Mukund. “On an average, we are expecting around 400 computers to be sold over next twelve months in each town. However, this is no easy task as the country is diverse and the territory large to cover,”

Acer is contemplating two strategies to reach the upcountry market. The first one is to work with existing distributors on a hub and spoke model, to use the distributor branch offices as hubs to reach smaller towns in their territory and engage with partners. The other option is to grow the Master Reseller (sub-distributor) network across the country, and then use their strengths to reach partners in their territories. “We had tried both options with limited success, over last year or so. While both have potential we need to work the economics of running the program throughout the year and build a recall to the small town reseller. With our lower costs of operations and aggressive pricing models we hope to reach the grassroots faster.”