HP INDIA SALES PRIVATE LIMITED

The PC Market in India

The PC market has seen a year on year growth of around 8.2% as per the latest report from IDC. The
Indian customers are continually shifting towards more premium products with traction towards
innovative forms factors like convertible and ultra-slim on the rise. Increasing focus on gaming
devices has also piqued interest of the consumers and they are inclined towards ‘gaming’ PCs which
symbolises performance with productivity. The PC channel is widespread with offline and online
retailer both driving PC penetration and chasing the lower tier towns, while simultaneously adopting
differential price strategies to engage first time PC buyers. Over the years, though, demand and
relevance for PC has come down significantly even while India is in a phase of educational and digital
reform. The IDC forecast for PC market shows an annual growth of 4% in subsequent years down
from the earlier years. (Refer Appendix 1)

Current India Market landscape

India currently has over 293 million household population, divided into urban (34%) and Rural (66%)
household population. These can be further segmented in two types of groups:
Socio economic classes – SEC A, B, C, D, E (Urban) and Rural R1, R2, R3, R4 and R5 (Rural)
Tiers – Tier 1 cities, Tier 2, Tier 3, Tier 4 and Tier 5 (Urban), VC1, VC2, VC3 and VC4 (Rural)
(Refer Appendix 2)

HP Inc
HP has dominated the Consumer PC market landscape for a decade now. The success story
complements to a strong leadership and product portfolio. HP brought in a paradigm shift in the
market by introducing the ‘Inking’ technology in 2017, which gave the surge to the convertible form
factor to an extent that HP now enjoys 62% market share in convertibles (Source: GFK June 2018 report).
Since then, it has also been gaining momentum in other spaces with major focus on premium and
gaming segments.
HP has a major advantage of a strong distribution channel with over 550 exclusive stores in over 270
cities, 400+ Large format retailer stores, 150 modern trade partners with multiple chains and
network of over 5000 T3 partners, all contributing to the winning strategy of HP Inc.
With the volume shipment of over 1.2 million every year, we have penetrated to almost 60% of the
Tier 1 and Tier 2 urban market in India.
HP has maintained its leadership with a market share of 31.6 per cent in 2018. The company
witnessed a growth of 6.1 per cent quarter-on-quarter and 19.8 per cent year-on-year growth. HP is
the only PC vendor in India who has posted a strong growth YOY. (Source: IDC reports Q2 2018)

Challenges to PC growth
Over the past 1 year, 4.5 million PC have been sold in Urban India, with over 75% of the sales coming
from the top 96 cities. This behaviour stimulates the fact that PC continues to be a metro
phenomenon. The penetration is as low as 20% in Tier 5 cities with Rural penetration at just 5% (Refer
Appendix 2)
PC has come to be regarded as a household device rather than a personal device with over 89% of
the PC owning households having just 1 PC and 3% of the total PC owning households having 3 or
more PCs. This data ideally should reflect in an increase in repeat buying every 2-3 years, but over
53% of the PCs have an average age of 3 or more years in the households. While repeat buyers
continue to grow at a slow pace, first time buyers will continue to dominate Indian PC market in the
foreseeable future. (Refer Appendix 3)
According to research, Tier 1 and Tier 2 cities are potentially the Repeat buyers while Tier 3, 4 and 5
cities are First time buyers. Over the last one year, only 25% of the repeat intenders have actually
resulted in a purchase.
Moreover, PC has become a less desired product over time, while niche household durables are
becoming more wanted. Laptops rank 18th as a necessity or need in a household and is further sliding
down the ladder, while niche products such as LED TV, Washing machine and Interior decoration have
successfully claimed top positions in the need ladder.
PC market is unlikely to see growth over the next 2 years unless there is a disruptive change in the
market or small behavioural changes being driven through PC OEMs.

Living the HP Dream

To contribute to the increase in the total PC market and consequently gaining a further foothold, it is
imperative for HP to increase the overall pie rather than take a competitive approach towards the
base TAM of 5 million PC growing at a declining rate every year.
To aid in the digital and educational reforms happening in the country and leverage the increasingly
wide choice of career options the Gen Z (6-23 years) and Millennial (24-34 years) population has
started undertaking, HP has created a platform to drive PC penetration in India. Instead of positioning
as a replacement of a smartphone, we want to be seen as a friend to a smartphone while highlighting
the three main activities which an individual cannot do on a smartphone – Learn, Create, Play.
Under the umbrella of Learn, Create, Play – HP wants to be a device to induce the love for learning,
while using plethora of technologies like Mixed Reality, Augmented Reality to accentuate the
learning curve for students, be an aspiration to the young population of the country who want to
pursue their dreams of photography, music, animation, designing etc and help them create their own
world with HP, and be an action driven and lifestyle inducing device for all non-educational purposes
like blogging, gaming, entertainment etc.
We believe this is the mantra to drive the stagnant growth of PC usage and accentuate the plethora
of use-cases a PC has in the life of an individual.

Problem Statement
1. With the PC TAM degrowing every year, how do we increase PC penetration especially in
markets with low PC penetration of 20-30% (Tier 3, 4, 5 cities)? Over 70% of the population
in these Tier cities are regarded as First Time Buyers who mostly see PC as an education
device but have barriers to PC usage. How do we make PC relevant to this population and
define a clear strategy?
2. PC has become a household device rather than a personal device resulting in over 89% of the
households having just one PC and the repeat purchase growth also declining over the years.
How do we change the persona of PC and bring it back to its original definition of ‘Personal
Computer’ instead of a household device? Moreover, as a household device, PC is being used
as just an entertainment device by the family which is being fast replaced by
smartphones/TVs. How can PC be made more relevant to households with kids?
3. With high PC penetration in Tier 1 and Tier 2 cities in Urban India, how do we bridge the gap
by catering to the niche population – photographers, designers, architects, music creators,
entrepreneurs, freelancers etc and build our ‘Create’ pillar?
 4. PC has slowly receded in the need hierarchy of the middle-class sections of the Urban India –
SEC C and D. The parents have an innate dream of giving the best education to their children,
but PC is now being regarded as a premium commodity than as an everyday learning and
computing device. How to change the PC positioning in the middle-class societies to break
the mental block of affordability and relevance.
As a larger view, we need to encompass PC penetration by driving the mantra of ‘Learn, Create,
Play’. The way future is shaped with no displays and everything happening with the click of a
button and projecting pixels in the air, what innovative factors can be brought in to make PC more
relevant for the coming generations while driving smaller initiatives in small pockets and niches
in the present?

Appendix 1

Appendix 2
Appendix 3

*Bubble size indicates estimated market size

Methodology to be followed:
Weightage will be given to adequate rigor employed in the case. Expert interviews, depth interviews
& focus groups are some of the tools that can be employed to derive consumer insights and thus, to
propose the right positioning & innovative form factor for the brand in driving TAM growth.

Rules & Regulations:

1. Participating teams should comprise of only three members
2. It is mandatory to have a first-year student as part of the team
3. Modification of team post registration will not be allowed

Three levels of this competition:

Level I: Registration form will be floated for registration of teams
Case allocation to all the teams
Level II: Submission of the executive summary of the ideas
Level II: Power point presentation of the shortlisted ideas

Level I: Registration and Case allocation

1. Case Study launch in the institute
2. Team registration last date: 9th September, 23:59 hours
3. Case Study allocation to the team leader

Level II: Process and rules for submission of the executive summary:
1. The concept of ‘Learn, Create, Play’ is not to restrict you but give a focussed direction to your
thoughts and ideas. Do not hesitate to experiment with ideas beyond this mantra, might as
well add a fourth dimension to it.
2. HP case study is a contest for innovative thinking with practical solutions.
3. Detailed marketing plan is not required and will not be judged
4. A synopsis of the case solution should be submitted as a word document in a minimum font
size of 11 points and single line spacing. The document should not exceed 10 pages.
5. A written case solution on the case should be submitted by team leader through email to
urvi.gupta@hp.com
6. The last date for receipt of the submission is 30th September, 23:59 hours
7. A shortlist of 10 teams shall be arrived at by evaluating the case solutions received
8. The shortlist shall be declared subsequently, and an email will be sent out to the qualifying
teams
Please remember:
1. Synopsis to be submitted as word document only
2. Font size should be minimum 11
3. The document should not exceed 10 pages
4. The document should have single line spacing

The details of Phase III will be communicated directly to the qualifying teams.