Dell Goes Offline

Last week I ordered an Inspiron notebook on the Dell China site. It took me only 30 minutes to study those specifications and made the choice to order online. It saved me a lot of time to look around the cybermart feeling lost and frustrated. What's more, it offered a good discount. Seven days later I recieved the machine without surprise because Dell had sent me tracking emails to report the delivery progress. On the next day, I received an automatically-sent email to instruct me how to run the applications and a call to survey my purchase experience and satisfaction from a customer service representative.

I'm not alone. An increasing number of Chinese customers feel comfortable shopping online and expect to pursue good deals online. When online shopping is becoming a kind of lifestyle though, the online direct sales giant decided to go back to retail.

Dell's booth in a Gome store in Chengdu, China

After announcing Dell going to Best Buy stores in USA last December, Dell initiated its localized go-retailing plan named Partner Direct in China on April 2nd. According to the press release, Min Yi Da, the president of Dell Greater China Region, expressed that "China is the second largest market for Dell in the world. Partner Direct is essential to Dell's business growth in China. We will devote to building a close partnership network."

Dell's global retailer network

The direct sales model as Dell's core advantage has been helping the company win a significant market share for years. But different consumer behaviors in the emerging markets ask for more flexibilities. It's reported in Dell's 08Q4 financial statement that BRIC country revenues grew a strong +36% y/y and represents 8% of Dell's revenues. While Dell's US business grew revenues 7% in the Q4, China and India revenues increased 32% and 57% respectively.

Partnership has been positioned into Dell's strategy. But it's not much easier to work with the powerful retailers than to change consumers' shopping habits. Dealing with the unprecedented logistics and inventory in the retailers' places, negotiating a best partnership agreement to sell more with less expenses, ard mitigating the negative competition between the traditional online business and the new retailing model, are top three questions to be answered.