It’s not easy to sell computers outside of the big cities, with logistics one of the main challenges.
I was at a logistics conference a year ago, where Carrefour president Jean-Luc Chereau showed slides from a typical loading dock (Carrefour has been in China since 1995, and has over 100 hypermarkets in dozens of cities around the country).
The reason I mention them is because one of the slides he showed is still stuck in my head. It was of a loading dock somewhere within China. A nice modern truck was pulled up, unloading cardboard boxes. Next to it was a bicycle, piled sky-high with computer boxes.
I’d hate to see that fall over in the middle of a busy street.
I also had a quick chat with Ying Wu, executive director of business transformation for global supply chain at Lenovo Group. He said that many of his company’s computers were sold at small mom-and-pop stores around China – many of which didn’t even have Internet access. As a result, Lenovo was forced to develop a sales tracking system that allowed store owners to report their data via cell phone text messages.
Despite these obstacles, China’s computer sales continue to rise.
In 2006, Gartner reports that total PC shipments to China were over 28 million – making it the second-largest computer market after the US. This year, Gartner predicts, Chinese consumers will buy more than 33 million desktops, notebooks, servers and other computers. And China’s computer sales will continue to grow at double-digit rates, the research firm predicts.
China has an advantage over many other markets, such as India, or Europe, in that everybody in the whole country reads the same language. As a result, applications and operating systems only need to be translated into Mandarin, and everyone is all set, making the computers accessible to people throughout China.
In addition, it seems that Chinese consumers clearly understand the need for computer ownership when it comes to their childrenâ€™s education – a significant driver for computer purchases in many homes.
Today’s story by Edward Russell shows that much of this growth is coming from China’s smaller cities – a sign of the growing maturity of markets throughout China.
Computer makers are adjusting their marketing and sales strategies for the new markets.
HP plans to expand its presence to 600 cities in the next two years – up from just 20 cities in 2003.
And it’s not just the smaller cities in China that are benefiting from increased attention from manufacturers, both foreign and domestic. Farmers are, as well.
And Lenovo announced a 1,499-yuan (US$199) computer last month designed for the rural market. Another major domestic manufacturer, Haier, has also announced a strategy and new products for the market.
Earlier this month, Haier announced a joint venture company with Henan Zhongcheng Computer Company to produce computers for rural consumers in Henan, expected to ship a million computers designed for rural residents in three and a half years. The first computers are due out this October.