To: kemble s. matter who wrote (76122 ) 11/2/1998 12:14:00 PM From: stockman_scott Read Replies (1) | Respond to of 176387
Kemble: Mickey has BIG PLANS FOR CHINA!!! The DELL direct BTO machine is about ready to go after one of the largest markets in the world. Hmmmmmm......Who said that "more of it will happen in the future than has happened in the past?" I think we should believe him. -Scott -------------------------------------------------------------- Enjoy this article: Monday November 2 11:53 AM EDT Dell brings PC sales machine to China By Matt Pottinger BEIJING (Reuters) - Dell Computer Corp. (Nasdaq:DELL - news)'s direct sales strategy has taken root in China, paving the way for the company to win a piece of the country's booming personal computer market, company founder Michael Dell said Monday. Dell has led the way in selling via telephone and on the Internet, which helps keep its inventories lean since it can produce just what direct buyers have ordered. Others who use traditional retail strategies have lost money from outdated products sitting on store shelves. ''We're implementing the business model that we have used all around the world here in China,'' said Dell, also chief executive officer and chairman of the American company, which has seen brisk sales since it entered the market in August. Since its founding in 1984, Dell has outstripped established computer rivals IBM Corp. and Compaq Corp. in total U.S. sales by selling custom-built machines direct to the consumer. Now the company hopes to sink its teeth into China, where personal computer sales are expected to exceed 10 million by 2000. Grounding the effort is a modern production facility in the southeastern port city of Xiamen. ''We have since August been delivering machines with a five-day or seven-day lead time, in a custom-configured fashion,'' he said. With a manufacturing and sales force of 300 people in nine Chinese cities, Dell has replicated its strategy of targeting multinational corporations and government enterprises as prime customers, company executives said. ''When you get out to the year 2000 or so, one percent market share in the China PC industry is about $250 million worth of business,'' said John Legere, Dell's Asia Pacific president. Legere noted that current China sales, which he estimated at $100 million in 1998, were only a fraction of the company's global earnings. ''We're confident that over the next five years we will see growth rates compound in excess of 100 percent,'' he said. A significant portion of Dell's international sales are made over the telephone or Internet, but Legere said China's market was not yet ripe for such methods. ''China has a relatively immature Internet structure, so the great success that Dell has around the world, which is about $6 million a day in Internet sales, will take time,'' Legere said. As part of its market push, Dell is also setting its sights on Legend Corp., among China's best recognized computer brand names. Company officials said Dell would beat local competition by offering top notch technical support and moving its custom built machines off the assembly lines in days, rather than weeks. Dell's competitiveness has already been proven in other Asian markets, even amid a downturn in the PC market, he said. ''In the second quarter, the overall Asian PC market shrank between 9 and 10 precent, and Dell grew a compounded year-on-year 34 percent,'' Legere said. ''The economic situtation is not a major component to Dell's success in Asia, or to the impact of our own global business'' because Dell has managed to continue stealing competitor's market share regardless of overall market health, he said. Dell, which had $6 million in sales in 1984, is expected to earn $15 billion globally in 1998. (Reuters/Wired)