Gome alliance boosts Dell retail expansion

An alliance struck with Gome Electrical Appliance Holdings, the country's biggest consumer electronics retailer, to give certain Dell products shelf space is accelerating the United States-based computer maker's retail expansion drive on the mainland.

Dell, the world's second-largest personal computer supplier, said the agreement had placed its select lines of notebooks and desktops in about 90 cities through 500 Gome stores, a 10-fold increase from 50 stores last October.

'Our retail strategy [on the mainland] is going very well, thanks to the excellent results with Gome,' said Steve Felice, Dell's president for Asia-Pacific and Japan. Dell started direct sales to the mainland about eight years ago.

Mr Felice said partnering Gome had helped Dell, the mainland's No4 personal computer supplier, 'meet growth targets' on the mainland, including efforts to set up points of sale in 1,000 cities from about 45 cities as of last year.

He declined to comment on plans to enlist new mainland retailers. 'We are continuing to look at additional strategies [to implement] throughout China,' he said.

Dell intends to penetrate smaller cities - those with populations of 500,000 to three million - where computer purchases continue to rise but where domestic brands Lenovo, Founder and Tongfang dominate.

International Data Corp (IDC) forecast total personal computer shipments to reach 43.67 million on the mainland this year, up from an estimated 36.84 million last year.

'There is plenty more room to grow on the mainland for top brand names such as Lenovo, Hewlett-Packard and Dell, without taking market share from each other,' said Kitty Fok, vice-president of Greater China research at IDC. 'More than half of Chinese consumers we've surveyed rely on recommendations from friends or family to make their PC-buying decisions, so the major computer vendors have an opportunity here to really make an impact on the retail market.'