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Dell To Sell PCs Through China Retailer
Dell Inc. announced a deal Monday to launch a retail presence in China by selling computers through the country's biggest chain of electronics stores as it struggles to capture a bigger share of the booming market.
The deal extends Dell's strategy of expanding beyond its traditional Internet- and phone-based sales model into retail to cope with competition from Hewlett-Packard Co. and other rivals. Dell also has targeted China with a low-cost PC unveiled in March and aimed at rural customers.
Sales will start in 50 Gome Group stores next month and expand to more stores early next year, said Michael Tatelman, vice president of marketing and sales for Dell's global consumer business.
"Our market share in China is obviously well below our global average. So we hope to be successful here and get our rightful share of the business," Tatelman said. "We think this partnership gives us a platform to certainly expand our business here."
Tatelman declined to give any sales projections.
Dell, based in Round Rock, Texas, used to lead global PC sales with its lower-cost direct sales model. But since being overtaken by HP last year, Dell has started to turn to retail sales, including recent deals with Wal-Mart Stores Inc. in the United States, Bic Camera Inc. in Japan and Carphone Warehouse PLC in Britain.
Dell says it has about 18 percent of China's PC market by revenue and 10 percent by number of units sold. Worldwide, its market share is 16.1 percent, according to consulting firm Gartner Group.
In China, Dell trails Beijing-based rival Lenovo Group Ltd., which bought IBM Corp.'s PC business in 2005, and Hewlett-Packard.
The new China sales plan calls for putting Dell employees in some Gome stores. The chain has about 700 outlets in 210 cities in China.
Gome already sells home computers from a wide range of brands, said Wang Junzhou, the company's executive vice president, who joined Tatelman at the news conference. He said some outlets have more than 200 different models on display.
Dell models to be sold at Gome include the XPS M1330 and Inspiron 1420 notebooks and XPS 720, Dimension 9200 and Inspiron 530 desktop, according to the company.
Dell plans to continue with its Internet and phone-based sales in China, Tatelman said. He declined to say which method was expected to be more profitable.
The low-cost basic desktop PCs designed for China that went on sale in March are priced at about $300, he said.
Gome Group is the parent company of Hong Kong-listed Gome Electrical Appliances Holding Ltd. Gome's rapid expansion has made its founder, Huang Guangyu, one of China's richest entrepreneurs, with a fortune estimated last year by Forbes magazine at $2.3 billion.