Dell Goes to the Mall

Posted on January 29, 2008
Filed Under China Business, China Distribution |

Pacific Epoch reports:

Dell China is going beyond directly-operated experience centers to franchise-like storefronts for the nationwide promotion of Dell consumer products, reports China Business News. According to Dell Greater China spokesman Zhang Saying, the company currently has more than 50 partners setting up shop in forth-, fifth- and sixth-tier markets. The sales partners will display Dell products and help consumers with online ordering. Dell will provide after-sales service and tech support, said the report.

Online sales aren’t enough to displace market leaders Lenovo and HP. Dell is looking to compete at the computer mall to increase sales and visibility. Fifty partners sounds like a drop in the ocean. I don’t know if these partners have their own sales networks or are just one owner, one shop. For Dell’s sake, I hope not.

This isn’t a franchise model. It’s just a retail reseller who will get a percentage of each sale. That the sales will still go through Dell’s online storefront means that the resellers will have limited, if any, flexibility with pricing. In the lets-make-a-deal culture of China’s computer malls, that will be an oddity. It remains to be seen if it will be a successful one.

The article makes no mention of incentive programs or sales targets for the resellers. The former gets the reseller to push product and the latter ensures that the reseller is worth Dell’s time (and money). It’s the tricky bit of the distribution business that Dell (as an organization) doesn’t have a lot of experience with. Maybe, with only fifty partners, this is really just a pilot program.

I’m not sure where in China would qualify as a “sixth-tier” market. Maybe some distant suburb of Hohhot, Inner Mongolia?

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