Acer to see mainland revenue break NT$10 billion next year

Dec 02, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Ben, CENS
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Taipei, Dec. 2, 2003 (CENS)--Acer Inc., one of Taiwan's largest manufacturers of information technology products, expects its sales in mainland China to break the NT$10 billion mark in 2004 for the first time ever. To facilitate the sales expansion in the mainland, the firm will earmark a budget of NT$300 million for marketing operations next year.

The firm also vows to set up seven more branches in mainland China next year. Following the establishment of a branch in Urumqi, Xinjiang Province last year, the company will branch out to Huhehaote, Neimenggu in 2004.

In line with the company's efforts to promote Acer-brand products in mainland market, Acer chairman Stan Shih has allowed mainland branches not to remit their profits back to Taiwan. Shih hopes that the mainland operations next year can maintain the same profit level as this year. Any additional earnings will be used to aggressively market Acer-brand products, Shih said.

Lin Hsien-lang, president of Acer Greater Chinese operations, said his company will raise the ratio of marketing budget to overall revenues to 3% next year from this year's 2%. He firmly said there will be a good chance for Acer to beat rival companies in mainland market.

To expand sales of own-brand products in the mainland, Acer headquarters will offer US$10 million to its mainland branches to rival competitors in marketing operations there.

Lin said Acer's marketing strategy in the mainland has worked well in that it the firm has widely set up branches in the mainland over the past several years. At present, the company has set up 18 branches there, which will be expanded to 25 next year with the additional seven ones to be set up in Changchun of Jilin Province, Tianjin Municipality, Dalian of Liaoning Province, Qingdao of Shangdong Province, Hefei of Anhui Province, Kunming of Yunnan Province, and Huhehaote of Neimenggu.

Acer targets to garner between NT$10 billion (US$294.11 million) and NT$11 billion (US$323.52 million) in sales in the mainland next year, up 50% from this year's anticipated NT$7.2 billion (US$211.76 million). In terms of the greater China market, the company has set a sales goal of US$800 million for next year.

Acer president J.T. Wang said he is not satisfied with his company's ranking in mainland's personal-computer market, now at the eighth place. He vows that his company will trigger a genuine-brand war to challenge the fifth-place ranking in mainland's PC market next year by pouring massive marketing budget.

To strengthen its mainland deployment and management control right, Acer recently has instructed its mainland branches to retrieve the rights to distribute notebook PCs from four agents there.

On the other hand, Acer is also aggressive in deploying distribution channels in the mainland. The company currently has between 800 to 900 distributors, 200 of which focusing on sales of household PCs; 400-some, business PCs; 217, notebook PCs; and 40, servers.

Acer said it targets to set up at least 3,000 distribution outlets in the mainland to take on major rival Legend Group, which has owned 3,000 distribution outlets.
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