Fez,
DELL's marketshare in India is practically insignificant, and it drives me completely nuts. I was in India, in New Delhi, on vacation in Feb/March this year and Compaq, IBM, and HP were the three leading foreign brands displayed prominently in the computer stores (in that order), while HP in fact had their own stores similar to the Gateway stores here. No one had heard of DELL. And this in a country that is English-speaking (unlike China), has a middle-class which is larger than the entire population of Germany with purchasing power to boot (unlike China), and much lower barriers to entry than China. Why DELL would target China ahead of India still beats me, and I had a long conversation with Kemble in Austin regarding this very point. However, I think Michael finally woke up to this since upon my return I found the following press release that Mohan provided to the thread back in March, and its posted below. Very late on DELL's part, but I guess its better late than never.
Incidentally, the leading PC brand in India is of course a domestic one called Wipro, which is manufactured in collaboration with Acer of Taiwan. Hope Mohan addresses your post as well since he probably would have the most up-to-date info on this subject. <VBG>
Best Wishes,
Sam
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NEW DELHI 16 MARCH, 1999
DELL Computer Corporation, the world's third largest computer company, is setting up a 100 per cent subsidiary in India.
The US-based, $18.2 bn direct marketing firm, which sells custom-built computers, is ranked third in the world after Compaq and IBM with a worldwide market share of over 8.8 per cent.
Mr Ron Goh, vice president, Asia, said the formalities of setting up the subsidiary would be completed by the end of the year. Initial investment in the subsidiary is expected to be about $8 m to $10 m, he added.
'We have decided to take the Indian market seriously and focus on tapping this one-of-the-largest growing market in the world. Our performance and visibility has not been satisfactory in the past and we plan to improve that with our direct presence here in the near future,' said Mr Goh.
At present, the company only has a liaison office in Bangalore: it sells its products through a network of 10 distributors in India. Despite the proposal to set up a 100 per cent subsidiary, Dell has decided to continue its partnership with existing distributors, which includes Tata Infotech, for after-sales services.
'At present, we have a mixed operation where every distributor, packaging services with the hardware we provide, is targeting all markets and undertaking after-sales jobs for every segment. In future, each distributor would target a niche market only. For example Tata Infotech would be undertaking after-sales-service,' said Mr Goh.
Dell also plans to sell products directly in India, but will target a separate market segment for its products. The company has engaged Bain & Company of US to undertake a marketing study to assess products, pricing and market segmentations to launch products.
The Indian subsidiary will be Dell's tenth subsidiary in Asia after Singapore, Malaysia, Thailand, China, Korea, Taiwan, New Zealand, Hong Kong and Australia. Dell started selling its products in India through a tie-up with PCL in 1992, but the alliance ran into trouble soon thereafter.
Ninety per cent of the company's revenues worldwide come from sales to corporates. The balance is largely on account of second-time buyers or experienced buyers.'The same model would be applicable in India and initially there would be no focus on first-time buyers. However, we are not averse to developing new strategies to tap the market to the fullest,' said Mr Goh.
The Dell official, however, ruled out any possibility of setting up a manufacturing facility in the country or shifting its configurations to non-Intel platforms in near future. |
