After two years of the Covid-19 pandemic, Asus has multiplied the announcements since the beginning of the year. At IFA in Berlin, the Taiwanese firm presented the ZenBook 17 Fold Oled, a way for it to demonstrate its innovation capabilities and reaffirm its ambitions in a market that is not immune to difficulties. Semiconductor shortages, global inflation and falling demand are indeed all hurdles to overcome. In this climate, Digital spoke with Jonathan Angel, Marketing Director Europe-Consumer PC at Asus.
JONATHAN ANGEL – I’ve been with Asus for 10 years, and I’ve never seen this… The market kind of self-regulated, then we started to see the first deficiencies that were causing us problems, with growing demand, strange. There was a transition between demand starting to drop and our inventory starting to fill up. Now we’re in a situation where demand has really calmed down and the shortage is increasing. I don’t know if this is a blessing in disguise, but the fact that this drop in demand helps to reduce the impact of the shortage on our business.
We highly anticipated this new demand, as did the entire industry, with foundries and component manufacturers producing a lot. Finally, we have more stocks and production coming in, and the demand is gone. As a result, this shortage, at the moment T, hardly affects the laptop market in Europe, because we have products that will arrive until the end of the year. For 2023, we will see how the situation will develop, because it seems that the shortage in the semiconductor market is likely to continue for some time.
For my part, I will not position myself on a date, but what is certain in the PC market at the moment, through the structure it has and the demand that is weakening, is that we still have a large enough number of productions coming up. In early 2023, therefore I think we will not have too many problems.
If the shortage continues, or even worsens, I have questions for the end of 2023. The problem is not necessarily quantity, because there are always things. We will have different value propositions for consumers, which we will have to adapt. We won’t have much wealth in supply. Today, in the French market, we have enormous wealth, and everything is available. But perhaps in 2023, there is a risk that there will be less breadth of coverage and less possibility.
This is not our will or our strategy. At Asus, we have pricing strategies that are pretty clear. Unlike players who do massive promotions, we have great value propositions. True, we have Black Friday promotions or that kind of thing, but the price variable is seen differently, especially in France where Asus is the leader and very well established, which is probably a little less the case in some countries. the price card is played a little more. But on the inflation side, if you take the price history of Asus, there is very little evolution because we tried to smooth that as much as possible between the exchange rate and the components. Then, you need to ask yourself what the buyer will be looking for and how we can possibly improve our products.
The PC is a countless number of variables, between the screen, the RAM, the CPU, the storage… We can always adjust many things to try to be as close as possible to consumer demand, when it is not necessary to keep the same product. and add 10% to the price. For us, the price impact is very limited, and we try to keep this limit to have a coherent offer, instead of imitating other manufacturers who raise their prices in this difficult context.
Before Covid, everything related to supply, logistics and production was a few people’s business. Today, any product, marketing or sales manager is interested in logistics. Everyone rediscovered the complexity of this profession and all the possibilities that flow from it. We have recruited and greatly organized logistics and supply, with a reflection on transport methods and questions, especially in the fact of relocating some factories in Europe for products such as portable computers for the general public, while a very large portion was produced. in China at present. All these questions arose and the teams had a great effort to adapt.
Historically, Asus has been a very B2C-oriented brand. In recent years, European countries, including France, have addressed the B2B market, but not necessarily a 100% dedicated product. For five years, an effort has been made, both in local markets from a commercial point of view, and from a product point of view at the parent company in Taiwan, to launch the ExpertBook range. The strategy is to tell us that we have a very strong position in the consumer market, but not in the B2B market. But it is a real lever for growth.
The first step is to rebuild sales teams to succeed in finding the right contacts in companies. It also goes through an indirect distribution network. Instead of selling companies directly, we will rely on partners, wholesalers or specialist resellers who know the companies well. The first approach focuses on SMEs.
We started with this target five years ago, with very good results in this segment. And now we are starting to attack some big companies, like Veolia. We are also entering the public market, with education having undergone a major transformation in the past two years. This is a sector with growing demand, with people very open to the idea of breaking what was done in the past. Conversely, the CIO of a CAC 40 company tends to choose brands that are well established in the B2B market, such as HP, Lenovo and Dell. But in education, when you have to start re-equipping some high schools, people are more open to what can be done. There, we had a card to play and we played it well.
France is in a very good position, as it is a higher performing country relative to its population and market. It is the third best performing country in the world, with China and the United States so large that they are very difficult to catch up with. Asus is stronger in France than in Brazil, Russia or Mexico. In France, in the consumer segment, Asus has been the leader for 10 years, with a 23 to 26% market share. The German and English subsidiaries are also doing well, but they are not yet where we are in the French market.
On the consumer side, we will continue to change. At IFA, we showcased the ZenBook 17 Fold, and many more products coming in 2023 to bring innovation to the mainstream. And on the professional side, we’re going to put together our ExpertBook range, which should really be very accurate in terms of spectrum and configuration compared to CIOs’ expectations. We will also consolidate our service and support offerings, which involves a huge effort from the parent company to offer all these ranges of services that we lacked before.