Lenovo, Suning reach 3-year strategic agreement

Personal computer giant Lenovo Group Ltd signed a three-year strategic agreement with Suning Appliance Co Ltd, targeting sales worth 30 billion yuan from Suning's distributing channels by 2015.

Lenovo, which has a product line including personal computers, mobile phones and tablet computers, plans to strengthen its cooperation with Suning Appliance in marketing, distribution and after-sale services, according to a report posted on caijing.com.cn.

Suning is a leading home appliance chain store operator in China. Yang Yuanqing, chief executive officer of Lenovo, said Suning's channels will be the priority channel for Lenovo to sell its new products. Lenovo will make more than 50 tailored products for Suning in the next three years.

Lenovo plans to build flagship booths in Suning's chain stores nationwide. The two companies also agreed to boost online sales of Lenovo products on suning.com, Suning's e-commerce platform.

Suning has been expanding into the online business sector in recent years. Its online sales hit 18 billion yuan last year.

"I don't think e-commerce will totally replace brick and mortar businesses, so Lenovo should find a balance between the online and offline models," Yang said.

He added that Suning plays a comprehensive role as both an online and offline retailer and a retail service provider, which is line with Lenovo's aims.

When it comes to distribution cooperation, the two companies will build a data-sharing platform and a customized supply and logistics system.