Dell’s New China Boss Speaks
Posted on January 6, 2008
Filed Under China Business, China Distribution |
The Shanghai Daily has a long article interviewing Amit Midha, Dell’s new China president. There’s nothing particularly earth shattering in the interview, Mr. Midha is typically effusive about China and the China market. Some highlights:
Cheap computers for the countryside
Dell, like the Haier-Intel Farmer PC partnership, is targeting rural China with a cheap PC:
To meet the demand for first-time PC buyers in China’s rural areas, Dell launched the EC280, a designed-in-China computer which costs about 2,300 yuan (US$310). Dell will have products for sub-tier markets in China, Midha said.
The cheap rural PC market is shaping up to be a popular strategic bet in China. The only problems for Dell are that your average Chinese farmer doesn’t shop online and isn’t a regular customer of Gome, Dell’s retail partner in China. Dell may have products for sub-tier markets in China, but actually selling and servicing them is a monumental challenge.
Dell goes both ways
Mr. Midha reasserts Dell’s new commitment to a dual retail/online sales model:
Midha thinks the hybrid sales strategy will bring Dell opportunities to be in touch with their clients’ needs.
Customers buying at computer shops will not buy online or through phone. For emerging markets, first-time buyers and laptop buyers will likely purchase at the stores. So Dell has an excellent opportunity to show its competency, superior customer experience and supplier chain efficiency to customers at the stores, according to Midha.
As Dell goes to bricks, other companies such as Lenovo are going for clicks. Chinese PC consumers are increasingly comfortable with online purchasing and the payment infrastructure is in place to support them. Partnering with Gome is a good idea, but Dell will need a much more diverse channel partner program in China to make a difference in its bottom line.
For the cool consumer
The retail partnership underscores Dell’s desire to become a player in the consumer PC market:
Midha also emphasized that industry design is important as the consumer PC market has become more sophisticated. In the past, Dell focused on enterprise clients and provided boxy and boring products.
“We want to define the industry benchmark, like Apple has done,” Midha said. “We want customers to be proud of owning a Dell product.”
Enterprises buy boxy and boring products, but they also buy in quantity and have an affinity for well-established brands. Enterprises are the bread and butter for most PC vendors. Consumers are well aware that PCs are a commodity despite the best efforts of almost all vendors. Lenovo is making a similar effort with its new IdeaPad. I doubt either effort will be successful. Apple is the only firm to have successfully built a powerful brand by bridging the consumer electronics and computer segments.
On a personal note I switched from a Dell laptop to a MacBook a year ago and will never go back.
Thinking and acting locally
Dell has shifted its management to local talent:
Midha has also made some changes in the Dell China’s management team so that now 75 percent of its members are Chinese against three Chinese out of 10 executives previously.
“I am hiring somebody because he has the right way of thinking, leadership skills, functional skills and passion to win,” Midha said. “Language is the last requirement.”
Expatriate management is expensive, quite often oblivious to Chinese social and business etiquette, and rarely has a long-term commitment to living and working in China. 75% is a good start, but only a start.
Dell is changing, but it remains to be seen if they have changed enough.
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I also got a Mac (had to get an old PowerBook, couldn’t afford a MacBook) but I too am never going back.