For his part, Legend's Liu thinks it will take some time for Dell's methods to succeed in China. Few Chinese consumers use credit cards, which is how most buyers pay for their purchases when ordering direct over the phone or Internet. Poor transport infrastructure will be another roadblock. It's nothing that Michael Dell hasn't heard before. In fact, Dell's sales to individual consumers are only a few percent of its total revenues in China.
Most sales are to businesses where payment methods are different.
And while foreign PC manufacturers other than Dell lost ground against Chinese brands last year, they are unlikely to lose too much sleep since the local brands' sales are mostly in the low-margin consumer market. Foreign manufacturers are focused on supplying to corporations, which demand the most sophisticated products and return stronger margins. Dell is no different. Most of its China sales are to large businesses requiring a mix of desktop PCs and the powerful server computers that control them. Dell says that direct selling isn't just about getting consumers to use telephones or the Internet to place orders.