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January 14, 1998


Size matters

India's largest PC market survey has sprung big surprises.

Email this story to a friend. Indian brands are competing fiercely with multinationals in the desktop PC market. And the aggressive 'unbranded assembled' products are not far behind, giving both the Indian and the foreign brands a run for their money.

The desktop PC market has increased phenomenally in just over a year. Up to October 1997 the installed PC base was over 2 million in the top 23
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cities, according to a report by the Indian Market Research Bureau.

During 1996-97 about 450,000 computers were sold. The top metros contributed to a large part of the installed PC figure.

However, the PC penetration in the smaller cities (with population between 2.5 to 5 million) and in towns (population ranging 1-2.5 million) has been very rapid.

The IMRB report, which details the largest ever syndicated research of the personal computer category, reveals that Indian brands captured 29 per cent of the market with multinational brands like Compaq and IBM gobbling up 24 per cent.

But the study predicts that next year the preference buys will be of multinational brands, which may grab as much as 37 per cent of the market. The Indian brands will follow at 33 per cent. The assembled market, however, is likely to go down from 47 per cent to 30 per cent.

Among the Indian brands HCL HP and Wipro have nearly equal shares of the total desktop PCs in the top 23 cities. While they have almost similar shares in the top two town classes (populations ranging from 2.5 million to over 5 million), HCL leads in the 1-2.5 million town class.

As a brand, HCL enjoys 18 per cent top-of-mind awareness and 37 per cent unaided awareness of computer brands among PC owners in households.

The other brands considered in the IMRB study include Apple, Compaq, IBM, Digital, HP, PCL and Zenith. On most counts, HCL emerges as the biggest Indian brand.

The assembled PC share is highly significant. Over half the total installation of desktop PCs are assembled machines. In some regions, the assembled brands take up at least 80 per cent of the PCs installed in homes.

The grey market's share shows that despite the liberalisation of the information technology sector, this segment is flourishing. It also belies the government's attempt to dismiss grey market operators as an insignificant threat to the organised sector.

According to the report, assembled PCs are able to sustain their edge in the market not just through lower prices but also through financing schemes.

However, there are signs that the assembled market is increasingly adopting Indian brands. This may sound like good news for the Indian brands but there is a little hitch. The loyalty parameters indicate that next year the Indian brands are likely to lose customers to the MNC brands.

So the net gains for the Indian brands will not be high. The MNC brands also show a high success rate in terms of sales. While HCL HP and Wipro have maximum consideration rate, their success in converting this into sales is lower than MNC brands.

For instance, Compaq's success rate is 32 per cent while that of HCL HP is 27 per cent. Wipro's is 24 per cent.

But the overall success rate which takes into account both competitive and non-competitive factors that convert into a sale, reveals that HCL HP is the highest along with IBM. Their success rate is 40 per cent.

Desktop buyers go for product quality in a big way. The study shows that on a descending scale of one to ten, product quality scores 3.2 in attributes considered important while making purchase. Price consideration is far lower at 4.4. Features such as looks, financing scheme and licensed software are actually not all that important in a PC purchase decision.

- Compiled from the Indian media

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