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Lenovo to revise application for own retail stores

, ET Bureau|
Updated: Nov 09, 2017, 05.33 PM IST
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Lenovo’s original application for retail FDI was made before the government announced changes in the policy last year, allowing exemption for three years from local sourcing to companies with cutting-edge technology.
Lenovo’s original application for retail FDI was made before the government announced changes in the policy last year, allowing exemption for three years from local sourcing to companies with cutting-edge technology.
Chinese personal computer (PC) maker Lenovo will revise its application for opening own retail stores in India whereby it will not seek exemption from 30% local sourcing offered to ‘cutting edge’ technology firms and remove request for retailing smartphones, a top official said.

Lenovo India managing director Rahul Agarwal said it is difficult to justify ‘cutting edge’ technology in the PC segment and hence, the firm is not applying for foreign direct investment (FDI) in retail through that route.

“We are confident to meet the 30% local sourcing requirement,” Agarwal said. “We will build the ecosystem in India and are already working on it.”

He said that already, 30-40% of desktop PCs and laptops Lenovo sell in the country are manufactured locally in its Puducherry plant. “We have a proper business plan with retail FDI and these stores will not just showcase products,” Agarwal said.

Lenovo’s original application for retail FDI was made before the government announced changes in the policy last year, allowing exemption for three years from local sourcing to companies with cutting-edge technology.

The Chinese technology major has also removed smartphones and servers from the ambit of retail FDI since its smartphone business is now handled by a separate group company. Also, Lenovo has no plans to directly sell servers which are B2B product and will be done through trade partners, Agarwal said.

Lenovo, which bought IBM’s PC business in 2005, is the third largest personal computer maker in India with 16.9% share in the overall market during April-June quarter, according to data from market tracker IDC India. HP leads the market with 33.8% share, followed by Dell at 17.7% share. In the consumer PC segment Lenovo was at the second slot, the researcher said.

In tablets, Lenovo leads the market with 21.8% share followed by Samsung with 20.6% and Datawind with 18.2% share, as per IDC data.
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