MARYLOU ANDREW: When you launched Lenovo in Pakistan, you said you wanted to be the number three player by the end of the first year. How far are you in making this a reality?
MOHAMMED HILILI: We announced the launch of Lenovo in Pakistan in August, but the first shipments arrived in October. At the press conference we said that we were aiming to have 10% of the market share by the end of the first year. We are still on track to achieve this by the last quarter of the next calendar year. We have a strong portfolio and we are a very well known brand in PCs and tablets which is helping us to reach the end user. In markets like the UAE and Saudi Arabia where we launched last year, we announced the same target and we achieved it. We have hired a strong team in Pakistan, we have a country GM, several sales people and an army of promoters who are selling our product to retailers and we will be recruiting more people in the next few months.
MLA: What kind of opportunity does the Pakistani smartphone market represent for Lenovo?
MH: According to the data we have, the total Pakistani market is approximately 20 million units a year, of which three million are smartphones and this represents a big potential for growth. In fact, we believe Pakistan is one of the biggest potential markets in our region. The population is one of the largest in the region and we are looking not only at smartphones, but at tablets and PCs as well. Our objective is to address this market with the proper tools in terms of people, marketing, spending and innovation and offer the full range of Lenovo products to the customer as soon as possible.
MLA: Which segments of the Pakistani smartphone market is Lenovo targeting?
MH: We have a large portfolio. We started in Pakistan with 10 models which cover all the segments of the market; from the under $100 smartphones to our top end models, which cost about $750. Currently, about five models are available in Pakistan and within the next month or so the full range will be available.
MLA: Research suggests that 80% of Pakistanis will buy phones priced at under $100. How important is this sub-$100 market for Lenovo?
SHARAY SHAMS: Pakistan’s total market average selling price falls around $50 to $55 for feature phones. For smartphones, average prices stand at less than $100, so we think that from a market standpoint, sub-$100 is a key category and I think Lenovo is well poised because we are addressing that price point with our portfolio and we have strong products with features and innovation at entry level as well. We also see that customers are aspiring to upgrade their smartphones and hence we are catering with multiple products in sub-plus $100 as well, like $150 to $200 products.
MLA: One of the problems with manufacturing smartphones in China is that local smartphones customers have to wait for a long time for parts. What is your experience?
MH: Our strategy worldwide is to partner with local partners – either a third party or a local distributor – to provide after sales service, so we do not really face this issue. The smartphone customer is very demanding and no one is going to wait for their smartphone to be repaired. So if we don’t have the right service we cannot grow. This is what we have been looking at and improving over the last two years.
MLA: How does Pakistan compare to other markets in the region?
SS: I can talk about the UAE but that is a very different market compared to Pakistan. There are three or four key factors that make it different from Pakistan and most of the other markets in the region. First, it is a very tourist driven market, so the target audience has very different behaviour patterns, which also are very different from a captive market like Pakistan. Secondly, the average selling price in the UAE is close to $200 whereas in Pakistan the majority is sub-$100. Third, the UAE is an extensively competitive market and has double the smartphone brands compared to Pakistan. The last key thing is that this is a heavy marketing market and a very organised retail one as well, so the cost of entry in the UAE is very different from most of the markets in the region.
MLA: What are Lenovo’s plans in terms of marketing in Pakistan?
MH: We believe that marketing is very important especially with a consumer product like smartphones. We have already started our outdoor marketing campaign and we believe in in-store execution and in-store presence. Once we ramp this up we will look at other media.
SS: We are still young in the market in terms of product availability. Our priority is to ramp up the channels and to make sure that customers see the product in retail, and also ensure that we have readiness in terms of basic levels of communication, such as outdoor. Once we grow into this business, TV is an option which one cannot ignore in Pakistan, and as a company we are exploring other media.
MLA: Lenovo is strongly linked with laptops and PCs around the world. Is this brand association a hindrance when it comes to marketing smartphones?
SS: Definitely not. We think that the brand credibility that was built with customers around the tablets and the PC business is helping all three categories and we are reaping a lot of benefits in terms of customer trust, innovation and quality.
MH: Our retail partners are very happy to have us not only in notebooks and tablets but also in the smartphone segment because they are then able to offer the full portfolio to their customers. I think we are one of the few brands which have the full range not only in smartphones but in tablets and notebooks as well.
MLA: Do you plan to launch Motorola-branded products?
MH: We have just closed the acquisition and we are looking at where the possibilities and opportunities for Motorola and Lenovo are in the region. So the decision has not been taken yet but we are looking at all markets which have potential for both brands.
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