Lenovo looks to boost its Thailand profile
The world’s largest computer maker, Beijing-based Lenovo Group, recently allocated the equivalent of an extra 150 million baht (US$5 million) to try and boost its presence in Thailand.
Of this amount, around 60 to 90 million baht will be used to develop Lenovo’s distribution channels within Thailand and improve marketing and management processes with the ultimate aim of broadening its overall share of the consumer PC market.
The remainder of the added funding will go into a major facelift for its Thai headquarters office and the construction of a demonstration centre for its new technology-leading servers.
Lenovo recently shelled out US$2.1 billion to purchase IBM’s server business, which will be managed within Lenovo’s enterprise business group. The acquisition was part of Lenovo Group’s strategy to maintain its strong share of the PC market. Currently, Lenovo holds a 20 percent share of the overall worldwide PC business, ahead of the California-based firm of Hewlett-Packard. In Thailand, Lenovo’s share stands in third place, at around 14 percent of the market.
Lenovo first became involved in the global PC marketplace in 2005 after purchasing IBM’s PC business. At the same time, it moved into the Thailand market and in the last nine years has seen a tenfold growth in business. Lenovo’s Thailand revenue has grown from around 210-300 million baht (US$7-10 million) in 2005 to an expected three billion baht (US$100 million) this year.
In Thailand, Lenovo operates three units: servers, mobiles, and PCs. The company has announced plans to set up a cloud computing and ecosystems service, similar to the one it plans to create in China.
Another factor influencing the acquisition of IBM’s server business was to allow Lenovo to pursue growth in tablets and smartphones. This is an area which has impacted the PC market and the company wants to be sure it can offset downswings in one part of its business with upswings in other areas.
The southeast Asian server business was worth around 2.9 trillion baht (US$980 million) in 2013 and grows at an average of two percent per annum. On the down side, the PC market has contracted by between five and 10 percent globally in recent years, a trend that must impact Lenovo’s bottom line. That contraction is yet another factor in Lenovo acquiring server businesses, with the short-term aim to become one of the global leaders in that sector of the marketplace.
A spokesperson for Lenovo said the company expects to see revenue growth of almost 10 percent in Thailand by the end of 2014, well and truly outpacing the flat growth of the country’s overall PC market.