Dell’s Growing Retail Sales Channel: So What?

Posted on July 4, 2008
Filed Under China Business, China Distribution |

China Tech News reports:

According to Min Yida, president of Dell Greater China, Dell has 1,800 direct shops in China and the company hopes to increase the number to 3,000 by the end of 2008.

Min is quoted by local media as saying that Dell has done a lot to change its business model over the last year in China. The company plans to develop the direct marketing model extensively and to directly compete with other manufacturers. Apart from increasing its direct store number, Dell will also increase its partners from 200 to 1,000.

At present, Dell’s direct shops in China are mainly opened in electronics stores such as Gome and Suning. Dell’s products sold in these stores are only for individual customers — products targeted at business users have not entered these stores.

In regards to the future development of Dell in China, Min says that statistics from the third parties shows that by 2015, the market scale of Dell in China will be four times as that of the United States. Therefore, the company will continuously increase its investment in China in the next few years.

Marbridge Daily points out what it means to the bottom line for Dell:

Direct sales currently account for only 15% of Dell China’s revenues. According to the company’s Q1 2008 report, Dell’s revenues in China have increased by 46%, and product shipments have increased 59%, giving the company a good head start in its quest for further growth.

I haven’t looked at the Q1 numbers (nor do I want to, really), but for all the shops within shops and shops in computer malls and all, Dell’s non-retail sales revenues seems to be doing great. The distinction, I guess, is that the reported revenue growth reflects business, rather than consumer, sales. Profits, of course, are another question entirely.

I’d be much more interested in seeing numbers on sales of consumer laptops. That market is bangin’. Anyways, kudos for going from 0 to 15% in a year.

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