In four short years, Dell has risen to become the number one supplier of desktops, laptops, and notebook computers in India, going from sales of only 79,244 in 2007 to over 1.1 Million in 2010. This is more than HPs market share of 1 Million and Lenovo’s market share of about 600,000. So what did Dell do to rise to the top, acquiring year-over-year growth of 55% along the way? This recent article in Fortune on “how Dell conquered India” provides some interesting insights.
So how did Dell do this?
- They set up a factory in India.
This cut local delivery time by 50% while improving profitability. - They changed the model.
While online worked great in North America, exclusive outlets worked much better in India. Once a customer selected a product, it was then delivered to their door (which saved on warehousing costs). - They borrowed from the insurance model.
Rather than use the established national, regional, and local retail distribution model, they determined that the insurance model fit best with their exclusive outlet / build-to-order strategy and used it instead. - They extended the on-site service model to small businesses and retail customers.
This gave them an edge over the competition. - They built a core team in India focussed on growth.
They were sure to recruit the best not only from other Dell international divisions, but from rivals (like HP and IBM) and retailers (Unilever, Whirlpool, and Airtel) who had experience in the India retail market.
In otherwords they:
- Established a local presence,
- Adapted to the local retail market, and
- Handed the reigns over to a team that understands the Indian marketplace.
While it will take a lot of work to brew up this recipe for success, it’s not a hard one to understand. To do well in a region, whether you are buying or selling, you need to go local, adapt, and work with the right partners who understand the region.