The world's second-largest PC maker Dell Inc plans to boost its
presence in China's smaller cities to take on rivals
Hewlett-Packard, Lenovo and Acer.
The company will expand to 1,000 Chinese cities from the current
45, Steve Felice, president of Dell, Asia-Pacific and Japan, said
on Friday.
"Most recently, we've seen a propensity to move up dramatically
in the fourth-, fifth- and sixth-tier cities (in China)," he
said.
"Some of that will be done through continued expansion of our
direct sales model and some of that will be done through increased
partnerships," he said, without giving a specific timeframe for the
expansion.
He also said Dell is considering turning its existing customer
experience centers into retail outlets.
Dell has partnered with Gome Electrical Appliances to sell PCs
in the retailer's 170 outlets in China.
But the country's largest electrical retailer contributes only
"a very small part" of Dell's revenue in China, said Sharon Zhang,
a press officer with Dell China.
Felice said Dell's cooperation with Gome is still "at the early
stage." He said Dell is in talks with other partners in China to
expand its reach in the country.
Dell's share price dropped 10 percent after the company released
a lower-than-expected third-quarter result on Thursday, with
year-on-year revenue growth of 9 percent but a 6 percent income
drop in its U.S. consumer business.
The company's shipment increased 26 percent in the third quarter
in China, 30 percent in Brazil and 42 percent in India.
Dell's relatively low growth rate in China is due to its larger
business base in the country, said Felice.
According to research house IDC, Dell is Asia's third-largest
computer seller, with an 8.8 percent share in the third quarter,
behind HP and Lenovo.
In June, Dell said it would "go beyond" its direct sales model
by selling PCs in retail outlets.
The company has teamed up with Wal-Mart in North America, Gome
in China and Carrefour SA in Europe to sell its products.
Dell could face fiercer competition in the U.S. and European
markets as Asian rivals like Lenovo and Acer race to expand in the
global market.
(China Daily December 1, 2007)
