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China¡¯s computer industry, like its economy, has grown phenomenally throughout the last 10 years. With more disposable income and a thirst for knowledge, consumers are rushing to stores to buy a personal computer (PC). ... With the global PC market in a depressing slump, China¡¯s growing PC market is seen as the only bright spot in the industry. But why then are the major PC manufacturers like IBM, HP, and Dell losing market share in this growing market? This paper will address the current PC market environment in China, the different distribution channels available, and the marketing strategies of local manufacturers. It will conclude with some recommendations for these foreign PC manufacturers on how to market their product in China.
Current Marketplace
From 1997 to 2000, PC sales have grown by 37% per year . ... To put this in perspective, the PC market in a developed Asian Pacific country like Japan was only 11. ... First, how big is the market? ... Although a majority of China¡¯s 1. ... Second, what is the market¡¯s growth potential? Relative to the rest of the world, China¡¯s growth potential is tremendous. The PC market is already saturated in both the U. ... , home penetration rate of PCs is close to 60% while in China, it is only at 10%. ... First, the growing popularity of the internet is one reason most consumers want to buy a PC. 80% of the consumers cite the Internet as the main reason why they are getting a PC . ...
With all of these opportunities, one wonders why foreign manufacturers are having such a hard time selling into the Chinese market. The following are just some of the challenges faced by foreign PC manufacturers in China. The big potential market in China has attracted many companies. Not only are the traditional PC manufacturers trying to get a piece of the pie, but local appliance manufacturers and distributors are also trying to sell their own private brand into the marketplace. The increased competition is good for consumers because it has lowered PC prices considerably. ... Another challenge facing foreign PC manufacturers is that the Chinese market place has vastly different market characteristics then what they are use to. ... The service provided by these foreign PC manufacturers needs to be localized to account for the differences in the demographics of the PC buyer. One problem with any foreign company entering the China market is that each region of China is quite heterogeneous. ... A strong distribution network allows a company to be close to its customers and serve a market more effectively. ... Even foreign manufacturers that have a factory in China are not allowed to own or manage any distribution networks. The lack of control is hindering the most efficient delivery of PCs to the China market.
Approximate Word count = 2245
Approximate Pages = 9
(250 words per page double spaced)
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