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Computer makers to hit rural trail

By Yu Hongyan (China Daily)
Updated: 2009-04-09 07:46

 

Peasants in Sheqi county, Henan province, buy computers in a shop.  [Song Tongjie]

Chinese computer makers are increasingly going rural to market their products to cash in on the recent government moves to subsidize appliance purchases.

According to a recent survey conducted by IT newspaper Popular Computer Week, Chinese farmers desire to own computers far outstrips the demand for appliances like TV sets and digital cameras.

Related readings:  China's Lenovo targets low-end rural market  PC bidders for rural program short-listed  Lenovo aims to sell 5m computers in rural markets in 3 years

Nearly 30 percent of the 4,160 farmers surveyed from six provinces expressed their keenness to possess a computer. Over 47 percent of the respondents from Shandong said they would prefer a computer that would assist them in their farming activities.

It is not just the farmers who are triggering the rural demand. Notebook computers have recently emerged as the most sought after appliance on prospective bridegroom's must-have appliance lists in rural areas.

Of course, it is not such a big expense, one would say. But to spend 5,000 to 6,000 yuan on an appliance that does not cook food or wash laundry is not a light decision for a rural family living on an average rural income.

According to the National Bureau of Statistics the average annual per capita net income for the country's 721 million rural residents is around 4,761 yuan.

Nearly 80 percent of the young couples in Zhangqiu, Shandong province, have expressed their desire to buy a computer after marriage, Du Linjun, deputy director of the city's economic and trade department said.

All of this must be sweet music for computer makers who are grappling with flat PC sales and high penetration in urban markets. The rural demand has suddenly opened up new vistas for growth.

China began its nationwide rural home appliance subsidy program on Feb 1 this year, by offering a 13-percent subsidy for rural consumers to buy computers, TV sets, refrigerators and mobile phones.

Several leading firms like HP, Dell and Haier are utilizing this opportunity and providing computers specially designed for rural residents. The companies have lined up nearly 183 models priced below 3,500 yuan.

According to analysts with only about 5 percent of the country's farmers owning computers, the program would help PC makers sell nearly 250 million computers in rural areas, or nearly 10 billion yuan in sales.

Migrant workers, who account for nearly 2.6 percent of the net users in the country, as the China Internet Network Information Center (CNNIC) statistics showed, are the most likely to affect purchase decisions at home, said Sun Zhenqiang, consumer PC manager at Tsinghua Tongfang Co Ltd.

Sun's company launched an extensive promotion campaign called "Red Flag Plan", by advertising in all the 18 trains used by most migrant workers.

Lenovo, China's largest PC maker, has set a target of selling 5 million computers in the rural market over the next three years.

Du Linjun from Zhangqiu, said he expects nearly 40,000 computers to be sold this year in the city.

The major challenge for rural consumers, however, is the limited access to the Internet, which also raises costs for web surfing.

"It costs me almost 100 yuan a month to surf the Internet," said a web user on the website of PCW. "That is like swallowing up 100 jin (110 pounds) of my grain."