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Asus Sees Strong Growth Potential in India's PC Market Amid Global Challenges

The global personal computer (PC) market has faced numerous challenges in recent years, from fluctuating demand to supply chain disruptions. However, Taiwanese tech giant Asus sees a bright spot in India. With low PC penetration rates and increasing interest in computing devices, India presents a significant growth opportunity for Asus. Senior company officials have expressed optimism about the Indian market, highlighting the company's strategic investments and expansion efforts across the country.

Low PC Penetration: A Vast Untapped Market

India's PC penetration per household is currently around 10 to 11 percent, meaning that approximately 90 percent of Indian households do not own a PC. This stark statistic underscores a vast untapped market that Asus aims to capitalize on. Arnold Su, Vice President of Consumer and Gaming PCs at Asus India, emphasized the growth potential, noting, "Which means around 90 percent of Indian households still do not have a PC, which means it is a very good opportunity for us."

The low penetration rate provides a fertile ground for Asus to expand its footprint. With a large portion of the population yet to adopt personal computing devices, the company sees an opportunity to significantly increase its market share by catering to first-time buyers and expanding into underserved regions.

Strategic Investments and Expansion

Asus is not just eyeing the Indian market but actively investing to ensure its products are available across the country. The company has made significant strides in expanding its reach, covering around 450 out of India's 750 districts. This extensive distribution network is crucial for penetrating deeper into the Indian market, especially in rural and semi-urban areas where PC ownership is particularly low.

Su elaborated on Asus's commitment, stating, "Asus is continuing to invest in India making its product available across the country." This investment is part of a broader strategy to establish a strong presence in one of the world's most promising markets for PC growth.

Market Trends and Consumer Behavior

The COVID-19 pandemic brought about a temporary surge in PC demand as remote work and online education became the norm. However, this spike was followed by a period of stagnation, both globally and in India. Despite these fluctuations, Asus remains optimistic about the future of the Indian PC market.

Peter Chang, General Manager for the Asia Pacific System Business Unit at Asus, noted that the post-pandemic period has shown signs of recovery in PC demand. "However, this year... the interest to buy a laptop has increased, so we believe that very soon the market should get back to normal," he said. Chang's optimism is grounded in the belief that India's PC market is better positioned than many others around the world.

Market Research Insights

Despite the optimistic outlook from Asus, market research firm International Data Corporation (IDC) reported a decline in PC shipments in India. According to IDC, shipments fell by about 30 percent year-on-year in the January-March 2023 quarter, down to 29.92 lakh units from 42.82 lakh units in the same quarter of the previous year. This decline was attributed to a slowdown in both the consumer and commercial segments.

However, Chang and Su believe that the long-term prospects remain strong. The dip in shipments can be seen as a market correction following the unprecedented demand surge during the pandemic. With renewed interest and increasing consumer confidence, Asus expects the market to stabilize and return to growth.

Embracing Artificial Intelligence

Artificial Intelligence (AI) is a significant focus for Asus as it looks to enhance its product offerings and remain competitive. Chang highlighted AI as a crucial area of development for the company. "Artificial intelligence right now is a very important topic for the Taipei-headquartered firm to incorporate," he said. By integrating AI capabilities into its devices, Asus aims to provide smarter, more efficient computing solutions that cater to the evolving needs of consumers.

Production-Linked Incentive (PLI) Scheme and Local Manufacturing

The Indian government's Production-Linked Incentive (PLI) scheme aims to boost local manufacturing and attract investment in the IT hardware sector. Asus has applied for the PLI scheme with its partners and has already commenced manufacturing operations in India. This move aligns with the company's strategy to localize production, reduce dependency on imports, and benefit from the incentives offered under the scheme.

Chang expressed optimism about the potential for further investment in India, stating, "We also hope that if things can be smooth, then we can keep investing." Local manufacturing not only helps Asus meet domestic demand more efficiently but also supports the Indian government's vision of becoming a global manufacturing hub.

Asus's optimism about the Indian PC market is rooted in the country's low penetration rates and the significant growth potential this represents. The company's strategic investments, extensive distribution network, and focus on innovative technologies like AI position it well to capitalize on this opportunity. While the market faces challenges, such as the recent decline in PC shipments, the long-term outlook remains positive.

As India continues to develop its digital infrastructure and more households adopt computing devices, Asus is poised to play a pivotal role in shaping the country's PC landscape. By staying committed to investment, local manufacturing, and innovation, Asus aims to not only capture market share but also contribute to the broader goal of digital inclusion in India.