Targeting rural markets, Lenovo courts newlyweds

In northern China's rural areas, the last three months of every year are often the marriage season for young people.

Since the cold weather prevents work in the fields, rural Chinese parents often choose this time to arrange wedding for their children.

Zhang Fu, a government employee in Bazhou county in Hebei province, is one of this season's grooms. He and his twin brother just moved into new houses and registered with their brides to marry.

However, unlike their peers from previous years, the brothers decided against private weddings with family members and instead chose a group wedding.

After buying two Lenovo all-in-one computers as wedding gifts, the twins were invited by Chinese computer maker Lenovo Group to participate in a group wedding held at a luxury villa. They also were offered huge discounts from the local wedding photographer.

"I bought the computer for work and game use," Zhang said, and added that Lenovo offered him and others discounts they had arranged with the photographers.

With the close of the National Day holiday sales season in big cities, people like Zhang in rural areas are becoming the new consumer target for companies like Lenovo.

PC demand outside big cities is growing rapidly, experts said.

"People in rural areas are now regarding computers as one of the 'must-have appliances' for their wedding gifts," said Zeng Qiang, general manager of Lenovo for Beijing, Tianjin and Hebei provinces.

He said the company last year partnered with local wedding photographers in selected areas to offer discounts to new computer buyers.

"The program worked very well, so we decided to expand that practice this year," Zeng said.

Zhao Shuliang, manager of Lenovo's store in Bazhou county, said sales of all-in-one computers, most of which are "wedding computers", accounted for about 12 percent of sales last month.

With sluggish sales in urban areas due to the global economic slowdown, other companies also are exploring rural consumer markets.

Domestic home appliance maker Haier reported earlier this year that it planned to establish 10,000 sales outlets and 5,000 service depots in rural areas.

Lenovo reported that it would establish 700 county-level stores and 7,800 sales and service outlets over the next three years.

Isaiah Cheung, general manager of US-based Hewlett-Packard's computer business in China, said in an earlier interview with China Business Weekly that he hopes the revenues from small and remote areas will account for 40 percent of HP's business in China in coming years.

With the Chinese government offering subsidies to computer buyers in rural areas, he said HP plans to establish 700 new county-level stores within the next three years.

Zeng from Lenovo said despite the huge market opportunities, doing business in rural areas is challenging.

Consumers have different demands than their big city peers, such as computers that are not as vulnerable to unstable voltage. Rural consumers also require more instructions on the basic use of computers and demand faster after-sales responses, Zeng said.

(China Daily 11/09/2009 page1)