Computers News
- Dell ties up with Gome to sell personal computers
Date: 25-Sep-2007 Sources: (Shenzhen Daily)
DELL Inc. said yesterday it would sell its latest range of personal computers through China's largest electronics retailer, Gome Group.
The tie-up with Gome Electrical Appliances Holding follows similar moves by Dell to expand beyond its direct-sales model to increase global market share.
'I am confident that we made the right decision to partner with a top-name brand to sustain our growth in China,'Gome president Chen Xiao said in a statement.
Beijing-based Gome will start retailing Dell products next month in 50 of its stores. Gome had 654 outlets in all at the end of June.
'For Dell this is a great opportunity to extend connections with Chinese customers we may not have reached in the past,'said Michael Tatelman, vice president of marketing and sales for Dell's global business.
China is the world's second-largest PC market by shipments.
The deal with Gome indicates how fast Dell, the world's second-biggest PC vendor after Hewlett-Packard Co., is trying to build a retail presence from almost zero before this year. Just last week, Dell said it would open a retail store in Moscow.
While its share among U.S. consumers is significant, Dell has a smaller share in markets overseas, such as China, where rivals Lenovo Group Ltd. and Hewlett-Packard Co. are leading in market share, according to technology-research firm IDC.
Dell is a distant fourth in China, according to IDC and Gartner Inc., primarily because of its lack of a retail network. This is a particular handicap in China's second and third-tier cities, where the next wave of growth is expected, said analysts, as these cities have less-developed Internet use, structures upon which Dell's direct-sales model rely.
China's PC market is expected to sustain annual growth of 25 percent in the coming three to five years, according to IDC's estimates.
Fresh growth is important for Dell, which has seen overall sales and profit slow over the past two years, largely because the company, which gets a large majority of its sales from businesses, missed out on a consumer boom in PC purchases. During much of this time, the company has clung to its direct model of selling PCs through the Internet or over the telephone, even as trends suggested consumers preferred to purchase laptop PCs in retail stores.
For Gome, which is the parent of Hong Kong-listed Gome Electrical Appliances Holding Ltd., the Dell arrangement will expand its PC product offerings amid increasingly heated competition. Last year, Best Buy Co., America's largest electronics chain, opened an outlet in Shanghai.
Best Buy, which owns a majority stake in China's fourth-largest electronics retailer, Jiangsu Five Star Appliance Co., will be speeding up expansion of its retail network following encouraging sales from its Shanghai store, according to a person familiar with the matter.
Pedestrians walk past a Gome Electrical Appliances Holdings Ltd. store in Guangzhou in this file photo. Dell Inc. will sell its desktop computers and laptops through Gome, China's largest electronics retailer.
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