BEIJING - Online commerce will become Lenovo Group's core sales channel on the Chinese mainland over the next three to five years, as the world's second-largest manufacturer of personal computers (PC) by market share begins to target the youth market, said a senior company executive.

"As Lenovo's main customer demographic is shifting to those born post-80's and post-90's - who are accustomed to purchasing items on the Internet - the electronic commerce (e-commerce) platform has become our fastest-growing sales channel," said Tang Jie, the company's vice-president.

Lenovo's e-commerce business has seen its sales volume grow by between 200 and 300 percent year-on-year annually since it entered the e-commerce industry in 2008, said Yang Xia, general manager of Lenovo's New Route to Market Consumer Business.

During the first half of the year, Lenovo's Internet sales equated to one PC every minute, with that figure doubling in the second half.

The sales volume of online shopping in China reached 197.51 billion yuan ($31 billion) in the third quarter, up 11.5 percent from the previous three months, according to data from iResearch Group. iResearch added that the volume is likely to surpass 230 billion yuan in the fourth quarter.

So far this year, the company's official online store has been the nation's third-largest business-to-customer (B2C) platform, and it's also the biggest B2C website for manufacturers, with page views hitting 3.6 million in the first half of the year.

Lenovo has also joined hands with online shopping websites such as taobao.com, 360buy.com and newegg.com.cn, to boost its sales.

However, some retailers are concerned that the PC maker's move onto the Web may affect sales in brick-and-mortar stores. Lenovo is able to offer lower prices on the Internet than these "entity" stores because virtual stores have lower operating costs in terms of overheads.

"Our study shows that the profits of brick-and-mortar retailers were not affected by the launch of the online platform," Tang said, "because the target customers began to split into two groups", one of which preferred shopping online and other in real stores.

Lenovo's Internet-based marketing platform will mainly target retail customers, and the company will handle business purchases through the more traditional platforms.

China Daily

(China Daily 11/12/2011 page9)