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Lenovo will expand its presence in rural China to maintain its competitive edge, according to one of the computer giant's top managers.

 

"China's fourth- to sixth-tier cities will become our major growth engine," said Chen Shaopeng, Lenovo's senior vice-president and president of China operations. "We plan to intensify cooperation with local partners to roll out new products that could help our customers find their needs."

 

According to figures from the research firm IDC, the average growth rate of the Chinese PC market in the next five years is expected to reach 11.7 percent. Meanwhile, the growth rate in China's fourth- to sixth-tier centers is expected to hit 23 percent.

 

In 2004, Lenovo released a low-end, 2,999 yuan PC, marking the beginning of a battle to lure lower-income customers.

 

"As China's economy continues to boom, more and more people in China's poor areas will join the PC age," Chen said.

 

PC giants Hewlett-Packard, Dell and Acer have followed Lenovo's lead by releasing low-end products.

 

"Our competitors are putting more pressure on this market than before, but that won't hurt our confidence," Chen said.

 

Since 2004, Lenovo has increased its presence in China's rural areas, but the company didn't see much profit until last year.

 

"Currently we have over 5,000 sales and 2,500 maintenance stores in China's fourth- to sixth-tier cities and we don't think any of our competitors could have an equivalent network in the next two to three years," Chen added.

 

In 2004, Lenovo signed a deal with the International Olympic Committee (IOC) to join the sponsorship program, becoming the first Chinese company in the high-profile club. The company also kicked off an Olympic tour campaign last year to hundreds of small cities where it donates and demonstrates its products.

 

Last year, Lenovo's PC shipments in China reached 38.7 percent. Its Chinese market share in the fourth quarter of 2006 reached 30.2 percent, beating Founder Electronics' 9.6 percent, Hewlett-Packard's 7.2 percent and Dell's 6.8 percent.

 

(China Daily June 5, 2007)