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Dell targets emerging markets with store PCs

Dell hopes that the move into selling store PCs will ensure it makes its mark in the emerging markets.

By Reuters, 24 Sep 2008 at 09:49

Dell is looking for the company's recent store driven retail drive to enable them to sell to consumers in emerging markets looking for their first PCs.

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.

Chief executive Michael Dell was asked at an emerging markets conference 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.

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 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 mobile phone sales in developing markets boded well for PC sales. "Users tend to buy their first PC about three years after buying their first mobile phone."

Dell also announced that 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.