Dell Goes to China
American computer maker Dell, has announced plans to take advantage of the ultra-hot, burgeoning Chinese economy by striking a deal with one of China’s biggest retail chains, GOME. Stateside, Dell used a unique business model of selling its laptops and PCs by phone and internet orders to become the world’s number one PC maker. Recently, though, Dell has seen its market share eroded by Hewlett-Packard, and hopes that becoming more involved in emerging markets will boost sales.
To start with, Dell will sell its computers in 50 major cities in China, with plans to expand further in 2008. Dell has recently adjusted its business model in the U.S. by offering its computers in Wal-Mart–the first time the computers were available in actual stores. Dell is hoping that the booming Chinese economy mixed with greater availability will attract Chinese consumers and push the Texas-based company back to the top. Certainly, the overseas and developing markets seem to be the way of the future. According to an article at thestreet.com:
(T)he PC market. . . is increasingly driven by consumers in emerging markets. Industry research firm IDC predicts that PC shipments will grow a mere 2.7% in the U.S. next year, while international shipments will jump 14.2%.
While Dell has had a fairly steady year, Hewlett-Packard has seen its shares rise in value, and its popularity soar. GOME is a powerful ally for Dell to be in business with. The retailer has over 1000 stores in 168 Chinese cities. Dell used a direct sales approach to invent itself. Now it will try a retail approach to reinvent the company.
