Dell Sets Up Shop in China

GOME stores will start selling the company's PCs.
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SAN FRANCISCO --

Dell

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is setting up a retail beachhead in one of the world's fastest-growing economies, announcing a deal with a Chinese electronics retailer on Monday.

The partnership between Dell and GOME stores, which Dell described as China's largest electronics retailer, underscores the PC maker's

new focus on consumers in emerging economies and represents its latest expansion onto the brick-and-mortar retail shelves it long ignored.

Dell said it will begin selling computers in GOME stores in about 50 major metropolitan areas in China in October, with plans to "significantly" expand its presence into the first half of next year.

"This is a great opportunity to extend connections with Chinese customers we may not have reached in the past," Michael Tatelman, head of sales and marketing for Dell's global consumer business, said in a statement.

Dell made its name selling PCs directly over the Internet and through phone orders. That strategy served it well for corporate customers, particularly in the U.S.

But it has proven inadequate for current trends in the PC market, which is increasingly driven by consumers in emerging markets. Industry research firm IDC predicts that PC shipments will grow a mere 2.7% in the U.S. next year, while international shipments will jump 14.2%.

That has pushed Dell -- which lost it title as the world's No. 1 PC maker to

Hewlett-Packard

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last year -- to revise its business model. Before the GOME arrangement, Dell had already announced retail deals with Bic Camera in Japan and Carphone Warehouse in the U.K.

Dell also began selling its PCs in

Wal-Mart

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stores in North America this summer.

According to Dell's announcement Monday, the company will sell various desktop and laptop PCs in China's GOME stores, including several models of its high-end XPS laptops. Dell said its employees will be on hand at GOME stores to help customers with purchases and to answer any questions.

Shares of Dell were up 1.4%, or 40 cents, at $28.16 in midday trading.