Dell Extends Foothold in China

Dell Inc. (Nasdaq: Dell) takes a new step in its sales network expansion. On September 18, 2009, the technology giant's first flagship store started operation in Shanghai. Steve Felice, president of Dell's Small and Medium Business, attended the opening ceremony.

The flagship store will not pay much attention to sales volume, but focus on brand promotion, providing opportunity for consumers to get familiar with Dell, pointed out Michael Yang, general manager of Dell Consumer, Greater China, and vice president of Dell Global.

The new store is built in the newly opened Buynow in Xujiahui, covering an area of 205 square meters. Independent exhibition areas are provided for Dell's five consumer brands. Once the technology giant releases new models, they will debut the store promptly.

Notably, there is one experience area provided for small and medium companies. In early 2009, Dell announced a business restructuring, dividing its global operations into four units, respectively, Global Consumer Group, Public Business, Large Enterprise and Small and Medium Business, which directly report to its headquarters.

Dell's consumer business took a market share of 9.3% in the second quarter, climbing 4.3 percentage points from a year earlier, according to IDC. Michael Yang says Dell's own statistics is higher than that of IDC.

He acknowledges that Dell's consumer PC growth in China is ascribed to the adjustment of sales networks. After Michael Dell became CEO of Dell, he decided to give up direct sales and sell computers by making full use of the strength of retailers.

At first, Dell built experience centers in China's major cities. Then, it teamed up with Gome Electrical Appliances Holding Ltd. (SEHK: 0493) and Suning Appliance Co., Ltd. (SZSE: 002024).

By far, Dell's own retail stores have topped 6,000, covering first- to sixth-tier cities. Their sales volume rose more than ten percent quarterly after the financial crisis and is expected to double by the end of 2009.

Lately, Dell inked an agreement with Sichuan Changhong Jiahua Information Product Co., Ltd. in Beijing, according to which the latter became the technology giant's fulfillment distributor around China, responsible for promoting Dell's product line.

Michael Yang believes that as a professional solution provider and information products supplier targeting the integration and optimization of global resources, Changhong Jiahua has rich experience in helping IT multinationals extend reach in the Chinese market.

Dell will further broaden its sales networks by making full use of the distribution, service and marketing systems of Changhong Jiahua, obtaining win-win cooperation and enlarging its market share.

(USD 1 = CNY 6.83)

Source: www.163.com (September 21, 2009)

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