Exploring the Far East
MAYBE IT HAS GOT EXTRAORDINARY faith in light of the Asian economic meltdown. Maybe it knows something we don’t. In either case, Dell Computer Corp. wants to win China.
The Round Rock, TX-based $15.2 billion direct marketer of computers has set up a factory in the southern city of Xiamen and plans to operate in nine metropolitan areas, including Beijing, Shanghai and Guangzhou.
Dell’s 135,000 sq. ft. customer center will initially employ 200 and will be modeled on the company’s factory and call center in Penang, Malaysia, which serves the company’s entire Asia/Pacific region.
Dell will try to adapt its U.S. model of selling-which encompasses inbound telemarketing, some lead-generation direct mail and the Internet-to the Chinese market.
Already the company has set up toll-free technical support numbers in Chinese, and is setting up an online store in both Chinese and English.
Spokesperson Neisha Frank says Dell will be going after smaller Chinese businesses, but concedes it will also target the local offices of large global corporations. Additional growth is expected to come from various government and state-run agencies.
At deadline, exact marketing plans hadn’t yet been formulated, though Frank does hint, “We’ll send out advertising.”
Just the same, company officials are said to be bracing themselves for the long haul, noting, for one thing, that Chinese people are less likely than Americans and others to buy products sight unseen. Other cultural differences are also likely to come into play.
Until now, Dell has been selling computers in China via distributors, which it still plans to use to help build its brand in the country.
According to industry figures, China is now the 10th-largest market for computers.
Dell has less than 1% market share, but it’s going on industry analyses predicting sales of computer systems in China will reach $10.6 billion units by 2002.
Other studies peg the compound annual growth rate for computers at about 30% per year over the next five years.
“Everybody expected Dell to go direct [in China] eventually, so it came as no surprise that they did,” says Lisa Cosmas, senior analyst at research firm International Data Corp. “Whether or not they will be successful is the $64 million question. If they’re not, nobody will be surprised.”
Despite the overall Asian economic crisis, Cosmas points out that this year may be the best time for Dell to make its move, since the Chinese government began cracking down on gray-market business operations and wants the rest of the industrialized world to take it seriously as a market.
