Hewlett-Packard steps up war against counterfeits

Sunday October 2 2011

By The EastAfrican team (Joint report)

HEWLETT-PACKARD has kicked off an anti-counterfeit war against fake products on the local market using its brand, and threatening the global IT firm’s foothold in the African market.

Announcing their expansion into Tanzania and Uganda recently, HP officials said the fast growing IT demand in emerging markets had caused a surge in counterfeit products, and in turn, massive losses for genuine manufacturers.

Moving into Africa now makes sense on two fronts for HP: To fight counterfeits and at the same time, consolidate its market share.
“We still see Africa as a solid growth market similar to India and China 15 years ago.

This is why we are entering Uganda and other emerging African markets in order to consolidate our market share across the globe.

In spite of the harsh economic indicators like inflation, we are optimistic that demand for new IT products will pick up,” said Stefanos Giourelis, managing director HP Africa.

In Uganda and Tanzania, the firm has recruited local dealers to grow HP into a formidable competitor against Dell, which enjoys 60 per cent market share. HP, on the other hand, remains dominant in the computer server market, with 65 per cent market share coupled with a 30 per cent share of the laptop market. Dell in comparison enjoys 35 per cent of the latter segment.

In the Tanzanian market, the Fair Competition Commission said IT accessories are the most counterfeited products, with the Commission seizing and destroying products worth $1.83 million between May 2005 and June 2011.

Mr Giourelis told The EastAfrican that HP’s anti-counterfeit programme has been operating quietly to check fake printer supplies worldwide, including in markets like Uganda and Tanzania.

HP has given relief to local distributors in Uganda who expect to make more money from customer care services, a key component in combating counterfeits. 

“HP’s presence will help local IT distributors that have long been inconvenienced by Nairobi-based manufacturers’ representatives who visit Kampala just once or twice a month to handle clients’ issues in spite of pressing demand,” argued Anil Kuruvilla, managing director of computerpoint Uganda, a distributor for IBM and other global IT players.

On the whole, lack of verified statistics has masked the overall impact of revenue losses among technology companies attributed to the sale of counterfeit products, but industry sources claim laptops are among the worst affected items.

Reported by Leonard Magomba and Bernard Busuulwa

Wycliffe Selebwa, country manager of HP Tanzania, the company in collaboration with Tanzanian authorities early this year seized over 7,000 counterfeits ready-for-sale cartridges and components.

“Such action is effective in protecting legitimate businesses and important local tax revenues, as well as building consumer’s trust in HP’s products,” explained Mr. Selebwa. 

HP is also using its entry into Uganda and Tanzania markets to earn goodwill from strategic partnerships with key institutions in Uganda—the Ministry of Health to improve early infant diagnosis and Makerere University for skills development.

In Tanzania, the firm has signed a deal with the University of Dar es Salaam to help fresh graduates transition to IT professionals.

Founded in 1939 by David Packard and Bill Hewlett in California, USA, HP’s range of products consists of personal computers and servers. HP annual revenues grew from roughly $500 million in 1971 to more than $90 billion to date amidst stiff competition from IBM and Dell.