Dell Wants to Sell Emerging Consumers their First PC

By Reuters  |  Posted 2008-09-23 Email Print this article Print
 
 
 
 
 
 
 

PC maker Dell, which last year introduced its first formal channel partner program for solution providers, Dell PartnerOne, is pushing another channel expansion in emerging markets -- retail. Dell is expanding its network of retail stores to target consumers without Internet access.

LONDON (Reuters) - Dell (DELL.O) hopes its new retail drive to sell in stores rather than just online will help it sell to consumers in emerging markets buying their first computer, Chief Executive Michael Dell said on Tuesday.

Dell, the world's second-biggest computer maker, has recently switched from a pure online and phone sales model to build an expanding network of retail stores, putting its PCs and laptops within the reach of consumers without Internet access.

Asked at an emerging markets conference organized by the Economist whether he aimed to sell consumers in emerging markets their second computer, once they were already online, he replied: "With 15,000 stores, we want to sell all the PCs."

Dell outlined a sales method he dubbed dell.com@retail, in which store staff, for example in India, take customers through an assisted sale on dell.com, combining a personal shopping experience with the advantages of having no store inventory.

The company said last week that slow demand had spread from the United States to Europe and Asia, and had not rebounded as expected after the summer lull.

Pim Dale, who heads Dell's operations in European, Middle Eastern and African emerging markets including Russia, said demand in Russia was "robust" although it was too early to judge the fallout from last week's banking sector meltdown.

Dell plans to more than double its staff in Russia to 100 by Christmas as it expands its data center and consultancy businesses. Dell's customers in Russia include the country's biggest Internet firm, Yandex, for whom it runs data centers.

Michael Dell, discussing the relative merits of the BRIC countries (Brazil, Russia, India and China) said Russia was a "great" market to which Dell remained committed, despite political turbulence there and high tariffs on some IT products.

"When markets go through these perturbations you have to be there to support your customers," he said.

In the BRIC countries overall, Dell had revenue growth of 41 percent on a 46 percent increase in units last quarter, which it said was more than three times the industry growth rate.

Michael Dell said on Tuesday that emerging markets continued to be an important part of Dell's growth strategy. "Five hundred thousand new users are coming on line every day, and a large proportion of these are in emerging economies," he said.

He added that growth in cellphone sales in developing markets boded well for PC sales. "Users tend to buy their first PC about three years after buying their first cellphone."

Dell also announced on Tuesday it aimed to become a "one-percent company," giving away 1 percent of pretax profits to education and digital inclusion projects mainly in emerging markets, by February 2010.

(Reporting by Georgina Prodhan; editing by Sue Thomas and Victoria Bryan)

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