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IFA:Lenovo Consider Medion Brand For Mass Retailers

IFA:Lenovo Consider Medion Brand For Mass Retailers

According to Rod Lappin Lenovo President for Asia Pacific the concept of introducing the Medion brand as a “discount or value add” brand has been discussed with the Australian management team, who in a space of 9 months have stripped “premium” market share away from several brands in particular Hewlett Packard and Toshiba. 

According to analysts the problem that Lenovo faces is that they need to grow share in Australia and to do that they need “volume sales” which means playing in the discount market.

The big issue is do they start discounting out Lenovo branded models or do they launch Medion into mass retailers. 

Lappin said “I think there is a place for Medion other than in Aldi, we have discussed it with the Australian management team and while no decision has been made about the Medion brand, we are talking about the issue”.

He added “The Lenovo brand can easily stay in the premium space and we could hypothetically bring the Medion brand in as a value brand, It’s highly likely this will happen, it will defiantly
will happen sometime, we are doing this elsewhere in the world 

Lappin said that Lenovo are looking to grow their share of the PC market from 20.6% to 30% despite the PC market declining 12% overall.

In Australia Lenovo is aiming to be the #2 brand however Lappin admits that Lenovo will not achieve that primarily selling premium products. 

He said that Lenovo who today is larger than Coca Cola with $46 Billion in sales last year have to compete in both the value and premium end of the market.

Nick Reynolds the Marketing Director of Lenovo Asia Pacific is not convinced that there is a need for the introduction of the Medion brand to Harvey Norman, JB Hi Fi or Officeworks.

“Aldi is growing in Australia, in fact they are the most successful Aldi subsidiary outside of Germany. This could give us the growth that we need without introducing the Medion brand to other retailers” said Reynolds.

These three retailers have delivered growth for Lenovo in Australia in the premium market, however Lappin admits that to get to #2 or even #1 he needs to deliver volume and that means playing in the value market which is why the Chinese Company has considered launching the Medion brand in Australia. 

Hewlett Packard who are currently #1 in the Australia market reacted to the launch of Lenovo in Australia by discounting out their product range which according to PC analysts was a “fatal mistake”.

While HP was discounting Lenovo retail partners who reaping the rewards of the sleek design of the Lenovo Yoga PC range which retailers were able to sell for a premium price.

Lappin said “Our competitors have done a good job of holding market share in Australia but they are now operating in a really low end of the PC marketplace due to their discounting strategies”
When asked if this was because Lenovo had come in with a premium product and was now forcing their competitors to discount to hold onto share he said “Yes”. 

According to Cameron Trainer from JB Hi Fi the launch of Lenovo in Australia led to overall PC growth for the mass retailer who during the 1st four months of the Lenovo brand going on sale were able to grow their premium PC business by over 35%. 
At IFA where Lenovo launched several new products including a new Yoga Tab Pro 3 tablet that delivers seriously sharp image to a screen from a built in projector and a new Lenovo Mix 700, that is affordable, lightweight and powerful and is a hybrid that is  going to give the new Microsoft Surface a run for market share Lappin said that “speed to market and seriously good designs” were helping Lenovo grow market share right around the world. 

He said that the new products were innovative and designed from the ground up based on selective lifestyle research among core groups of consumers. 

He said that he was confident that Lenovo is in a good position to get to #2 in the Australian market with the new product range.

After getting a hands on with the new MIIX 700 I am tipping that it will quickly become the best 2-in-1 in the Australian market in 2016 and that the Yoga Tab Pro 3 tablet will be a hot seller running into Xmas because of the unique design, seriously sharp screen and brilliant Dolby Atmos sound.