Dell ties up with GOME to sell PCs in China

By Kirby Chien

BEIJING (Reuters) - Dell Inc (DELL.O: Quote, Profile, Research, Stock Buzz), the world's No.2 personal computer maker, said it would sell its latest range through China's largest electronics retailer, GOME Group, aiming to improve on its single-digit mainland market share.

The tie-up with GOME Electrical Appliances Holding Ltd (0493.HK: Quote, Profile, Research, Stock Buzz) follows similar moves in the United States by Dell to expand beyond its direct-sales model to increase sales and market share after losing the top-selling PC slot to Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz) last year.

"This adds another dimension to the Dell direct model," Michael Tatelman, vice president of marketing and sales for Dell's global business, told reporters.

The China market is dominated by domestic giant Lenovo (0992.HK: Quote, Profile, Research, Stock Buzz), whose 35 percent market share is nearly triple nearest rival HP's.

"Dell has not been very aggressive in the China market, but is showing it is willing to make a commitment to the mainland market," said Antonio Wang, a PC analyst for IDC.

While analysts said the move was positive for Dell, they noted that computer sales in China were being driven by fifth- and sixth-tier cities, a market where GOME does not have a strong presence but is expanding into.

"We will grow with GOME," said Tatelman.

Dell would also have to deal with the problem of taking care of customers as it would need to train GOME employees to understand and sell Dell's product line.