Lenovo moves into China’s hinterland and invests in the country’s sixth-tier

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Below is an excerpt from an article that ran in China Daily today on Lenovo’s plans to expand into China’s fourth- to sixth-tier cities:

Lenovo will expand its presence in rural China to maintain its competitive edge, according to one of the computer giant’s top managers.

“China’s fourth- to sixth-tier cities will become our major growth engine,” said Chen Shaopeng, Lenovo’s senior vice-president and president of China operations. “We plan to intensify cooperation with local partners to roll out new products that could help our customers find their needs.”

According to figures from the research firm IDC, the average growth rate of the Chinese PC market in the next five years is expected to reach 11.7 percent. Meanwhile, the growth rate in China’s fourth- to sixth-tier centers is expected to hit 23 percent. 

The question is what exactly constitutes a sixth tier city? Running water and a stable electrical supply?

1 thought on “Lenovo moves into China’s hinterland and invests in the country’s sixth-tier

    Interestingly, upon speaking to Lenovos Chairman Liu Chuanzhi at an event in the States recently, he mentioned to me that he did not see Lenovo as a “Chinese” company, and requested that linkage be dropped. “We are a global business” were his comments, “not a Chinese business”.

    I find that fascinating when recently, many Chinese businessmen are taken up in the rhetoric of Chinese arrogance in their dealings. In reality, most of them fail when looking to invest overseas and in markets where free trade and competition exist. Lenovo are an example of a very well managed business that has broken out of China via acquisition and has turned itself into a multinational. That is a very different type of business model than the majority of China’s businessmen currently believe themselves to be. For sure, this is not going to be the “Chinese century”. An Asian century maybe, but Chinese – I doubt. It’s an era of globalisation where countries matter less, (including the USA) and is not an era of specific superpower building. Lenovo are one of the few out-of-China companies to have recognised this.

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