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The world's No 1 PC-maker Dell Inc is even more sure its direct business model fits China now it is reporting solid growth in Chinese markets in the first quarter of the fiscal year from February 2006.

 

Its unit shipments in China grew by 40 percent, doubling the industry growth rate and 10 percent higher than Dell's growth rate in the Asia Pacific and Japan.

 

Dell Asia Pacific President Steve Felice said the growth comes from big firms doing a lot of buying as well as from purchases by everyday consumers and small businesses.

 

He dismissed analysts' doubts about the effectiveness of the direct business model in the Chinese market, which was introduced in August 1998.

 

"It is Dell's direct business model that causes the success," he said.

 

He said Dell can only give better service by giving the customer what they want.

 

He added that the direct model can make the product price more attractive.

 

"(Dell) can offer the highest quality products with good service experience at very attractive prices," he said. "I think that most customers will adopt that model."

 

According to the quarterly report, revenue from China increased 29 percent year-on-year, 12 percent higher than that of the Asia Pacific and Japan, but lower than in South Korea and India, which were 54 percent and 40 percent respectively.

 

Dell is vying for the No 1 position in the Chinese PC market, currently held by domestic firm Lenovo.

 

"All indicates that we are doing the right thing," said Felice. "We will continue to make steady progress."

 

According to market research house IDC, in the fourth quarter of 2005, Dell was No 3 in China with a 9.5 percent market share.

 

"But there is a long road (ahead) there Lenovo has a significant market share (in China)," added Felice.

 

To support growth, Dell's second manufacturing facility, also in Xiamen, began production in January. "The factory will double capacity, so it is clearly supporting the current growth we see," said Felice.

 

(China Daily May 23, 2006)