CORE CONVERSATIONS

Inside Lenovo’s Bet on Speed, Stores, and Servers

Consumer tech delivery models are undergoing rapid transformation, driven by rising expectations set by quick commerce and changing shopper behaviour. Lenovo, one of India’s top PC and smartphone makers, is responding with a sharply focused omni-channel strategy that now contributes a quarter of its total domestic revenue. Speaking to The Core Report: Weekend Edition, Lenovo India Managing Director Shailendra Katyal explained how the company stitched together its 550 exclusive stores with Lenovo’s online store to offer customers a four-hour delivery promise—well before quick commerce became mainstream.

“We have inventory visibility at each of those stores, which is very important. You can’t promise delivery and have a stock-out. So the data has to be real-time on pricing,” Katyal said. This backend system enables the company to sync store inventory with online orders, making ultra-fast fulfilment possible. Alongside this, Lenovo has also introduced a configure-to-order (CTO) option for high-end, personalised PCs, where customers can customise specifications and wait two to three weeks for delivery.

Katyal said the company’s omni-channel model accounts for about 25% of total revenues, while traditional retailers, including thousands of mom-and-pop electronics outlets, contribute 30–35%. Large-format retail chains like Croma and Reliance Digital account for 15–20% of sales. Meanwhile, enterprise and B2B customers—including direct institutional buyers and value-added resellers—make up roughly 50–60% of Lenovo’s India business.

These numbers also reflect that even as online commerce gains ground, consumer electronics brands are recalibrating their sales strategies—pushing for speed, convenience and customisation—without abandoning traditional retail or enterprise channels.

Lenovo’s India manufacturing footprint is also expanding steadily across categories to keep up with the demand. Katyal explained that all smartphones sold in the country are locally made through a partnership with Dixon Technologies, with over 1 million units exported to North America last year. On the PC side, 30–40% of Lenovo’s domestic demand is produced in India, split between its legacy Pondicherry plant and Dixon’s newer plant.

“From a long-term strategy point of view, India is an important part of our diversified supply chain. We have plants all over the world, ” Katyal said, adding that Lenovo has actively participated in all three phases of the Production-Linked Incentive (PLI) scheme. While phones have achieved over 50% local value addition—thanks to a stronger component ecosystem—PCs have crossed that threshold on some models under the government’s Preferential Market Access programme. However, key hardware such as chips and operating systems is still imported.

Lenovo is also betting on India’s data centre potential. Katyal said that India generates nearly 20% of the world’s data but hosts only 3% of global data centre capacity, a gap the company sees as a long-term growth opportunity. To address the high energy costs of data infrastructure, Lenovo is rolling out its warm water-based server cooling system, Neptune. “You can now cool servers with warm water, and use that same water to heat your office, buildings or pools,” Katyal said, pointing to growing interest in energy-efficient infrastructure.

CORE NUMBER

Rs 2.1 lakh crore

This is the total value of defence contracts awarded by the Ministry of Defence in FY25—its highest ever. Of this, Rs 1.6 lakh crore worth of orders went to domestic firms, according to Business Standard. Notably, contracts worth Rs 1 lakh crore were finalised in just the last two months. Capital procurement approvals in March alone crossed Rs 54,000 crore and included BrahMos missiles, Netra aircraft, and naval systems. Defence exports are also expected to rise, with India targeting Rs 50,000 crore by FY29, up from Rs 21,000 crore in FY24, the report added.

—🛢️ Barrel Battles! Saudi Arabia’s plans to invest in two oil refineries in India have hit a snag over crude supply terms. While both nations agreed to collaborate, talks have stalled as Saudi Arabia insists on supplying 50% of the crude at official selling prices, often higher than market rates. India prefers the supply to match Saudi’s expected 20% equity stake—and at a discount. With past deals failing and only a fraction of the pledged $100 billion investment realised, pressure is mounting. Saudi Aramco is eyeing a 15% stake in Indian Oil Corporation’s Panipat refinery as it looks to regain market share from Russia.

—💥 IBC Turmoil Again! The Centre is reviewing the Supreme Court’s surprise order that scrapped JSW Steel’s Rs 19,700 crore resolution plan for Bhushan Power and Steel Ltd (BPSL), Reuters reported. The report quoted Department of Financial Services (DFS) Secretary M Nagaraju, who stated it has taken a ‘position on the issue and will soon decide on the next steps’. On April 2, the apex court rejected JSW Steel’s resolution for BPSL and instead ordered a liquidation. Reports also indicated that Indian banks, with over Rs 31,000 crore in exposure, now face huge potential losses.

—🚩 Adani Goes Damage Control. Representatives of Indian billionaire Gautam Adani reportedly met Trump administration officials to seek dismissal of US criminal charges in a bribery probe, with a resolution likely within a month. US authorities had indicted Adani and his nephew for allegedly bribing officials to secure power contracts and misleading investors during a $750 million Adani Green bond sale. Adani’s aides argue the case doesn't align with Trump’s priorities. Adani Green denied wrongdoing, while US regulators and Adani Enterprises declined to comment.

—🖥️🎬 Incoming: Even More Netflix Ads! Ads on Connected TV (CTV) will grow by 40% in the near term, according to a Deloitte report. CTV is essentially a device that allows you to stream video content on the internet; so a TV, laptop or phone that streams Netflix and Prime Video would classify as a CTV device. At WAVES 2025, an entertainment summit that took place from May 1-4 in Mumbai, Deloitte India released a report saying CTV ads grew from 450 crore in 2022 to Rs 1,500 crore in 2024. Right now, CTV accounts for 1.5% of India’s digital advertising market, but its share will grow to 7-8% soon, per the report.

PODCAST

On Episode 573 of The Core Report, financial journalist Govindraj Ethiraj talks to C S Vigneshwar, President at FADA as well as Gulam Zia, Senior Executive Director - Research, Advisory, Infrastructure, and Valuation, Executive Director at Knight Frank.

• FIIs buy $4.8 billion in 12 sessions as markets rise

• Oil prices fall as OPEC supply overhang sets in. Rupee gains

• CNG car sales overtake diesel for the first time, hybrid is bigger than electric

• India’s real estate sales trends are now diverging after moving in sync for some years

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas