In an insightful interaction with CRN India, Sudhir Goel, Chief Business Officer, Acer India, shares the company’s remarkable achievements and growth trajectory in 2024. Goel highlights the key drivers behind Acer India’s 40% year-on-year growth, focusing on the expansion of their channel business and retail presence. He also discusses the company’s local manufacturing efforts under the “Make in India” initiative, the growing demand for AI-powered PCs, and Acer India’s plans to expand into Tier 1 and Tier 2 cities while continuing to invest in innovative solutions for customers.
Acer India has achieved a record-breaking year in 2024. What were the key drivers behind this growth?
Acer India’s growth in 2024 can be attributed to a few key drivers. Firstly, we’ve gained market share across all channels and customer segments, despite the overall market being flat. Our year-on-year growth exceeded 40%, primarily driven by the channel business. We’ve expanded our reach through a wide range of outlets, including mom-and-pop shops, multi-brand outlets, exclusive stores, and large-format retail.
Two major reasons stand out – the wider product selection, which now caters to a diverse customer base, from first-time buyers to gamers, and the productivity improvement in all channels. We’ve also focused heavily on capacity expansion and investment in both exclusive stores and our sub-distribution networks. For instance, exclusive brand outlets grew by 30-40%, while other channels saw substantial growth as well.
Additionally, we’ve tailored programs to incentivise both channel partners and in-store promoters. These programs include continuous training to enhance their skills and knowledge about products and competition. We’ve also implemented IT tools to provide real-time insights and motivate partners through clear, measurable rewards. This has enabled us to create a seamless value proposition across all channels, ensuring that our partners can convert customer interest into sales more effectively.
What percentage of Acer India’s business is channel focused?
Around 75% of Acer India’s business comes from offline channel partners across all product segments. While this varies slightly, the majority of sales, particularly in the PC category, are driven by these partners. This applies across sectors, including government, private, consumer, SMBs, and enterprises.
Would you like to mention any partner programmes and incentives that you offer to your partners?
We offer various incentive programs tailored to different types of channels and product categories. The same approach doesn’t work for everyone, so we customise programmes based on the specific partner type. These also vary depending on seasonality—for example, we have special programmes during Diwali for consumer-focused sales, while student-related products have incentives aimed at the educational segment. Programmes for mom-and-pop shops, multi-brand outlets, exclusive brand outlets, and LFRs are all different. Additionally, we introduce special incentives based on the season to further support our partners.
Right now partners are not just simply box movers, but value added solution providers. So do you have any upskilling and learning programmes for them?
Yes, you’re right. We recognise that the skill set of frontline salespeople, even at the bottom of the pyramid, is crucial. They need to be equipped with the right knowledge of products and technologies to assess customer needs and provide accurate solutions, especially since today’s customers, particularly younger ones, are well-informed.
We have monthly training programmes that focus on two key areas – soft skills, such as communication and sales cycles, and technical knowledge, covering our product range and even competitor products. Our product, sales, and marketing teams from our Bangalore head office connect with frontline salespeople, including in-store promoters and APCs, to provide tailored training. These programmes are adjusted based on the type of product the salesperson is handling.
In recent times there has been a surge in popularity in AI-powered PCs. How do you see the demand is for them in personal computing?
In India, we see two types of customers when it comes to AI-powered PCs. First-time buyers, who are transitioning from smartphones to PCs, may find it difficult to see the immediate value in AI features. They aren’t used to using a PC, so convincing them to invest in AI-driven devices is challenging. However, for existing PC users who are looking to upgrade, AI-powered PCs offer clear benefits, whether it’s improved productivity, better performance, or lighter, more efficient devices.
AI is a buzzword across industries, but its real value comes down to specific use cases. As a brand, we focus on demonstrating how AI can improve day-to-day tasks, such as enhancing audio or video quality during meetings or making work-from-home setups more efficient. When we show customers how AI directly impacts their productivity, whether through education or professional applications, they begin to understand its advantages.
While converting first-time buyers to AI may be tough, it’s easier for current users who are already familiar with the technology. As we continue to promote AI’s benefits and educate consumers about its practical uses, we’ve seen consistent growth in demand for AI-powered PCs.
Acer India has ambitious local manufacturing goals under the “Make in India” initiative. What challenges have you faced in achieving these targets, and how are you addressing them?
From the start, Acer India has been committed to local manufacturing, launching our operations in Pondicherry in our first year. We’ve always believed in being closer to the market, even before the broader push for “Make in India” began about five to seven years ago. Over the years, we’ve consistently expanded our product categories, capacity, and processes.
We’ve worked closely with the Government of India, particularly in policy-making, and were one of the few companies to receive PLI 1.0 incentives, despite it not fully meeting industry needs. We are also participating in PLI 2.0, though it doesn’t yet match all our expectations.
For desktops, we’ve achieved 90% local production with 60-70% value addition. Laptops are more challenging due to their short product lifecycle, but we are increasing local manufacturing. In categories like tablets, nearly 100% are made in India, while for servers, it’s around 50%. We are committed to increasing local production as we continue to grow.
With the ever increasing e-commerce business in India, has there been any significant drop in physical retail business?
We’ve observed that while e-commerce is growing, it’s overstated to say it’s overtaking physical retail. Offline retail remains crucial, especially branded and large-format stores, because they offer a tangible “look and feel” experience. This is important, even for younger buyers who value seeing products in person. In fact, branded retail is growing, not shrinking. We’ve seen strong demand for exclusive and multi-brand counters, and in our business plan, we aim to expand retail counters by over 25%. We believe the offline market will continue to grow alongside e-commerce.
With increasing competition and rapid technological advancements, what innovations or new product categories can we expect from Acer India in the near future?
At Acer India, we’re focused on making AI solutions accessible to customers with budget constraints. Currently, AI solutions are expensive, which limits adoption. Our goal is to either innovate on the product side or offer financing solutions to bring AI into the mainstream, helping more customers access it.
In terms of expansion, we recently opened our second Acer Plaza and plan to continue growing these large-format stores. Customers come in for IT products but also show interest in other categories, like TVs, which opens up more opportunities. By 2025, we aim to expand the number of Acer Plazas to around 50 to 70.
For our exclusive brand outlets, we are targeting 30% growth by the end of 2025. We’re also looking to increase our presence in large-format retail stores like Croma, Reliance, and Vijay Sales. We plan to boost Acer India’s presence by increasing our counter space by 20-25% in existing stores.
Are you focussing only in the metros or in Tier 1 and Tier 2 cities as well?
We are initially focusing on metros, but as we grow, we aim to expand into Tier 1 and Tier 2 cities as well. This is a new venture, so we’re learning as we go, considering factors like retail space and positioning. We’re already in discussions with partners and always prioritise giving existing partners the first opportunity to join our expansion. If they’re interested, we support them, and if not, we find alternatives. It’s part of our commitment to loyal partners, helping them grow into new product or customer segments. Whether it’s IT or consumer electronics, we’re here to support their business plans.
