Dell eyes sales through retail stores

With the first Dell personal computers (PCs) going on sale in Wal-Mart Stores in the US and Puerto Rico, the $56 billion company is reportedly planning to sell its PCs through retail stores in Asia (including India) and Australia.

Having prided itself solely on direct online sales since the 1990s, the company is now expected to add retail channels for PC sales in India, China, Australia and Japan.

"While we continue to explore more sales channels in India, we have nothing specific to share at this moment," a Dell India spokesperson said. Sources aver, though, that the company is already talking to retail partners in the region.

This is a significant strategic shift, ostensibly prompted by founder Michael Dell's return to the company early this year. Trying to gain back some of the momentum it lost to Hewlett Packard globally, the retail channel is seen as one logical way to grow sales. In this context, the country is a huge market.

Dell expects revenues from the country to double, touching the $1 billion mark (around Rs 4,450 crore) from the current $0.5 billion (around Rs 2,100 crore) figure by 2007-08.

Having entered the government and education vertical a couple of months ago, the company is now targeting the banking, finance and insurance services (BFSI) sector.

"This is a great opportunity for Dell. We have deep worldwide experience in these segments and should be able to offer meaningful services to our clients," said Rajan Anandan, vice-president and general manager, Dell India.

While the company declined to talk about specific deals, sources say it has already got a deal from Union Bank of India. On the government front, Dell has bagged a few deals from the likes of the Indian Railways and Elcot, say sources.

Dell had also announced it would start commercial production at its Sriperumbudur (outskirts of Chennai) plant in the second half of this year. It has been importing PCs from its overseas facility in Penang in Malaysia and China to cater to the domestic PC market.

Typically, it takes 12 to 15 days to ship PCs to the country. It now expects to reduce the lead time for delivering a PC to customers by 50 per cent, besides saving on air freight charges and import duty. Incidentally, it has also received the FIPB clearance (only for corporates and not for individuals) for direct sales in the country.

Over the years, Dell has made cumulative investments of more than $150 million (around Rs 600 crore) in expanding its research capabilities in the country. It currently employs around 12,000 people here "� its second largest employee base outside the United States.