A Tale of Two Lenovos: How the Company Thrives in China

It may be the world’s largest PC vendor, but Lenovo isn’t exactly a household name in the U.S. That could change over the next few years as the company builds up its brand, and sells more product to U.S. consumers. But in its home market of China, Lenovo long ago finished the task of making its name known, and is reaping the benefits.

Lenovo’s distribution stretches so far that its stores can even be found in a small town like this on the outskirts of Zhengzhou, China. The company’s wide reach has helped propel its PC market share to 36 percent for the country, according to research firm IDC. For over 15 years, the company has reigned as China’s top PC vendor. In contrast, Lenovo’s market share for the U.S. was at 10 percent during the second quarter, putting it behind Apple, Dell and HP.

In 2011, Lenovo also launched its first tablet, the “LePad” initially in China, before making the devices available months later worldwide. While Apple remains the biggest tablet vendor in China, Lenovo has carved out its own presence, ranking third in the nation’s market, according to research firm IDC. Prices for the company’s Android tablets can go as low as 899 yuan ($146).

PCs, however, remain the bread and butter of Lenovo’s core business. Many consumers in the U.S. may know Lenovo more by its ThinkPad brand, which it bought from IBM in 2005. In China, the company also uses the ThinkPad name, and has stores in the country specifically devoted to the line of products.

Lenovo’s CEO has said its smartphones will eventually come to the U.S. Already, the handsets are available in developing markets such as Indonesia, India and Vietnam. The company’s phones and tablets are selling so well, that in the past fiscal quarter, the products surpassed its PC sales. Helping to drive much of that growth was the Chinese market.

Lenovo is not alone among Chinese companies wanting to expand internationally. Handset vendors such as Huawei, ZTE, and Xiaomi are also popular in the country, but are still building their brand recognition outside China. Time will tell whether if any can enjoy the same success in the U.S.