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Lenovo Plans to Open About 7 More Flagship Stores Across China

Lenovo Group Ltd. (992) plans to open about seven more flagship stores in China by 2016 as the world’s largest maker of personal computers accelerates its push into smartphones and tablets.

The retail outlets would be company-owned and are planned for Beijing, Shanghai, Shenzhen and Guangzhou, Chen Xudong, president of China operations for the ThinkPad maker, said in an interview yesterday. The first Lenovo location opened in Beijing last year, and the second opens Aug. 10.

Lenovo in the past relied on a network of 40,000 partner-owned shops to sell its computers in China. Its entry into smartphone sales in 2010 is pushing the PC maker to adopt a retail strategy similar to that of Apple Inc. (AAPL), which opened its first China outlet in Beijing’s Sanlitun district in 2008.

“As we expand our business into smartphones, tablets and smart TV, that requires a lot of storefront to show the products,” Chen said at the company’s headquarters in Beijing. “It’s not just a point of sales, it’s a place for people to experience the products.”

Lenovo is developing mobile devices and TVs as it seeks to lure customers from Apple and Samsung Electronics Co. (005930) and weather a global slump in demand for PCs. The company, which reported a 90 percent gain in fourth-quarter profit in May, ranked No. 4 in global smartphone shipments in the second quarter, according to IDC.

Upscale Malls

In addition to the company-owned outlets, the number of partner-owned shops exclusively selling all Lenovo products will expand to 300 in the next three years from about 100 now, Chen said.

To better match the buying patterns for handsets, those stores are being located in upscale shopping malls instead of the electronics markets where PCs traditionally are sold, Chen said.

He declined to comment on how much the company is investing in the retail expansion.

Apple has 11 stores in Beijing, Shanghai, Shenzhen, Chengdu and Hong Kong. Chief Executive officer Tim Cook in April said the company would double the number of outlets in the world’s largest market for computers and smartphones.

Lenovo doesn’t have plans for company-owned flagship stores in markets outside China, Chen said.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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