China Retail News reports that Haier is planning a huge expansion of its retail outlets for PCs:

Until now, Haier has set up 800 boutique retail stores for its computers, but it expects to increase the number of stores to 4000 by the end of this year.

To facilitate this Haier is planning to move its marketing, sales, and planning department to Beijing in November. This is interesting because Haier has successfully run its white goods business from its base in Shandong Province’s Qingdao. But while Haier leads that market in China, it’s still just a minor player in the PC market.

The new office will be in Zhongguancun (HSP - Haidian Software Park), a science park in Beijing where pretty much everyone who is anyone has some facility or another. From their site:

Dubbed China’s Silicon Valley, the HSP not only has about 4800 domestic enterprises engaged in IT, including the Legend Group, the Founder Group of Peking University, Tong fang Enterprises of Tsinghua University, the Stone Group of China Telecom, it also has over 1000 IT companies from abroad, 20 of which are ranked within the world’s top 200 high-tech businesses. IBM, Microsoft, HP, Agilent Technologies, 3COM, Oracle, Cisco, Motorola, P&G, Lucent Bell Labs, ABB, Novo Nordisk, MITSUBISHI, Mitsui & Co., NEC, NTT Data, Fujisu, Sumitomo, etc are all operating successfully in the HSP.

It’s a good move for Haier. It brings them into the heart of the marketplace where competitors, partners, investors, and distributors interact. Qingdao may beat Beijing for beauty, but it’s not really on the IT radar in China.

But back to the 3200 new outlets, by the end of this year. The boutique retail stores are small shops in the large IT malls that are found all over China. It’s unclear if Haier will actually own and operate these shops or will sign some kind of sales agreement with a local firm. Although the shops may be branded as Haier, I can’t imagine they’re going to hire 20,000-odd people to staff and run them.

I can’t believe it will be a franchise model, either. There simply isn’t enough time. So they’re going to partner with local firms. Haier has a lot of experience with sales and distribution through retailers from their white goods business, but finding and equipping 3200 partners in two months seems pretty ambitious. For their sake, I hope the announcement has come after the program has been developed rather than the other way around.

It’s obvious that Haier is very serious about becoming a market leader in China’s crowded PC market. With 4000 retail outlets they’ll certainly have access to that market. Now they have to be able to compete on price, quality, and service. The hard part is only beginning.

p.s. No word yet on Haier’s rumored plans to acquire Founder, but at least they’re going to be neighbors in Beijing.

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