Dell to Sell its PCs through Chinese Retailer

By Alice Turner
13:29, September 24th 2007
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Dell to Sell its PCs through Chinese Retailer

Dell Inc., the world’s second-largest computer producer, announced that it reached a deal on Monday with Gome, China’s largest chain of electronics stores, to distribute its personal computers and notebooks all over their country in an attempt to increase their slice of the Chinese booming market.

Sales will start through 50 Gome stores followed by an extension to more stores in the first half of next year, according to Michael Tatelman, vice president of marketing and sales for Dell's global consumer business.

"For Dell, this is a great opportunity to extend connections with Chinese customers we have not reached in the past," Tatelman said in the statement on Monday.

The Chinese retailer has approximately 950 stores across Chinese 210 cities, Gome Vice President Wang Junzhou said during a press conference held on Monday.

With this deal, Dell continues its expansion of its traditional internet- and phone-based sales strategy by turning to retail, in an attempt to handle the increasing competition from Hewlett-Packard Co., world’s largest computer maker, and other rivals.

Another piece of their new strategy is the low-cost PC unveiled in March, which targets the rural customers and will be highly promoted in China.

In May, Dell announced it would sell its products through Wal-Mart Stores Inc. in the U.S., and since then it has signed similar deals with retailers in the U.K., Japan and Russia. This strategic move followed Dell’s overtaking by HP last year.

"Although the direct model is great for many people, in Asian cultures and China in particular many people want to see and touch and feel things before they actually take them home," Tatelman said on the sidelines of the press conference.

Dell Inc., based in Round Rock, Texas, is the fourth-biggest computer seller on the Chinese market by shipments behind Lenovo Group Ltd., Hewlett-Packard, and Founder Technology Group Corp., according to research firms IDC and Gartner Inc. Dell estimates it has about 18 percent of China's PC market by revenue and 10 percent by number of units sold.

Worldwide, Dell’s market share is 16.1 percent, according to consulting firm Gartner Group.

The contract signed with Dell, will also boost Gome’s PC product offerings, thus giving it more chances to cope with the increasing competition from Best Buy Co., America's largest electronics chain. The world-wide known electronics retailer opened an outlet in Shanghai last year.



© 2007 - 2009 - eFluxMedia
Tags: Dell, Gome, China
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