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Acer aims to break into China's top three

(China Daily)
Updated: 2008-07-16 13:48

"No magic, only basic," that's what Gianfranco Lanci, Acer corporate president says when talking about his success in leading Acer into a global brand. Acer's global sales reached $14.07 billion in 2007, up 25 percent from 2006, making it the world's third largest PC vendor. Its recent acquisitions of the US computer company Gateway and its European counterpart Packard Bell, along with a merger with Taiwanese handheld devices designer E-TEN this March once again brought the international IT industry's attention to Taiwan-based Acer's future development path. Gianfranco Lanci recently spoke to China Daily reporter Zhou Yan about Acer's multi-brand marketing strategies and its new business plans in coming years.

Q: It has been three years since you last visited China, and the Chinese market has experienced much change in that time. How do you position China in your global marketing strategy?

A: If we compare China today to the old days when I visited China three years ago, there have been many big changes. I don't visit China very frequently, but it does not mean we don't take care of this market. Instead, we put a lot of focus on China.

We witnessed our distinct performance in China, and this market now contributes 5 percent, or $703 million, of our 2007 global sales revenue. In our upper managing team, we talk about China almost every week and have a meeting with Acer China management team via Internet or video conference every month.

Q: Globalization began nearly twenty years ago at Acer, but it didn't seem very successful until recently. In the past three years, you have achieved great success in Europe and the US. What are the reasons behind the drive into these markets? What are the differences between the past and the present Acer?

A: In the past, we were not very successful, because we did manufacturing, OEM, and branding before 2000. This structure was too complicated working towards to globalization. And for Acer, it's quite natural and normal to become a global company. Therefore, we spun off our manufacturing and design operations into Wistron, an original design manufacturer based in Taiwan, in 2002, and have since focused on marketing and services instead.

Our success in the European market is partly due to the fact that we entered into this region earlier than some other companies. We understand the importance of localization, and utilize local employees when we decide to move into a new country. In my opinion, if you want to know a market, you have to know more about local people. And Acer knows local people very well.

Another reason is that we focus on the PC area only, and make consolidations to strengthen our key business. We emphasize on implementation and are dedicated to do it quicker than our competitors. As a company coming from Asia, we don't think of Asia as the center of the world, and we understand what's going on in the global context. Otherwise, you couldn't compete.

Q: You've been very active in mergers and acquisitions on a global scale recently. What's the business rationale behind this? Do you have more acquisition plans in China to further strengthen your brand

A: 2007 is a milestone year for Acer, and we are going to be devoted to building up a multi-brand company. In the past thirty years, people in the PC industry talk about technology, but PCs tends to become a commodity, and we are not going to talk about technology only. We also talk about branding, and focus on our multi-brand strategy.

The key for this strategy is scalability, design and quality. In these senses, we need more brands.

And our serial acquisition of Gateway, Packard Bell and E-Ten did not mean to block any competitors, but to serve our purpose of product scale expansion and our emphasis on technology design. There are four brands under our company, Acer, Gateway, Packard Bell, and E-Machine. Our multi-brand strategy will promote different brands catering for different regions. In Europe, we will focus on advocating Acer and Packard Bell while in the US and Asia-Pacific region, Acer and Gateway will represent us.

We know that China is a fast growing economy. The demand for PCs closely relates to the population volume, and its need has increased rapidly. According to our experience in the past five years, it takes time to become the top three PC vendors in China, and we'll make efforts to achieve our goal to squeeze into the top 3 of this market. But we have no plan to do any acquisition in Chinese mainland so far.

Q: As the top sponsor for London 2012 Olympics, what is your Olympic marketing plans?

A: Our partnership with Olympics will bring us a fresh approach, and we are going to kick off our Olympic marketing activities from 2009 after the Beijing Olympic Games. The Olympics is one of the few events that attract millions of people worldwide.

Acer also has a very good association with many other sports events. We sponsor Ferrari team in Formula 1, and we also sponsor some football clubs in Europe. The value brought from sports is similar to Acer's value.