US firm steps up mainland challenge with solutions and products showcase on wheels
Already present in more than 1,000 cities and with ties to top domestic electronics chains, computer maker Dell has intensified its challenge to Lenovo and other mainland rivals with a grassroots marketing campaign that will take its products to more small cities across the country.
The personal computer supplier's 'Dell on Wheels' programme launched recently aims to cover 100 low-tier cities in 16 provinces, targeting both small firms and consumers.
'We're increasingly managing our business consistent with what we see as growth trends. We want to take resources and deploy them to areas where there are plenty of opportunities,' said company founder and chief executive Michael Dell.
The low-cost, barnstorming initiative lasting six months features advanced new computers and business solutions that would ultimately be carried to the small cities on a fleet of 11 custom-built trucks, said Amit Midha, Dell Greater China president.
Initially, two of the trucks, each equipped with a solutions centre geared for small companies and a product showcase and manned by company salesmen and local channel partners, were deployed last month, Mr Midha said.
'We're doing whatever it takes to reach more consumers and be more widely considered as a trustworthy brand,' he said.
'By 2015, customers in China will buy and use more computer systems than any country in the world. Dell wants to play a leading role in anticipating and understanding the requirements of this vast market.'
Dell on Wheels is expected to reach consumers who may know about the company and its direct-sales model of ordering via the internet or telephone but would end up buying local brands and so-called 'white boxes' - unbranded desktop computers assembled by small electronics shops - because they are widely available in small cities.
Rob Enderle, president of the Enderle Group, noted in a recent analysis of Dell's mainland operations that Chinese consumers are culturally oriented to buy and barter from real people.
'They find direct selling largely unsatisfying and, as a result, Dell of China is vastly different in operation from the Dell in the United States,' Mr Enderle wrote.
US-based Dell, which started operations on the mainland in 1998, has seen its direct presence in the country spread to about 1,200 cities from roughly 45 last year.
That has been helped by its ties to major domestic electronics retailers including Gome Electrical Appliance Holdings and Sunning Appliance, and its PartnerDirect programme, which taps resellers focused on the mainland's large number of small and medium-sized businesses.
According to technology analyst firm International Data Corp, growing significantly on the mainland - whose computer shipments are projected to climb to 64.9 million units in 2011 from 36.8 million last year - has to be a big priority for Dell amid the global economic slowdown.
'Dell suffered a disappointing third quarter in all regions [worldwide] except for the Asia-Pacific [excluding Japan], where it grew 33.7 per cent year over year,' IDC reported.
'Even if global economic uncertainty further erodes the region in future quarters, domestic demand in key markets like China may keep the momentum going.'
Mr Dell said the decision to shift focus on faster-growing regions is 'no different, whether the market is growing fast or slowing down'.
Steve Felice, president for Asia-Pacific and Japan, said Dell was keen to strengthen its mainland financing programme.
'We do see that small businesses have a more difficult time getting financing in general, so we shall try to work with them closely and meet their needs,' he said.
The group estimates it will buy about US$23 billion in technology components and related products and services from local suppliers this year, up from US$18 billion in 2006.