Winning moves in times of change
Being a late starter is no hurdle to success for true winners, ZTE Corp’s mobile devices division chief tells Li Tao at the company headquarters in Shenzhen.
It is no easy job for a new entrant to catch up with front-runners in a short time, especially when the latecomer has also undergone significant transitions. But after two years striving for a full makeover, ZTE Corp’s mobile devices segment chief says his smartphones are ready to shake up the market.
“It is time,” said ZTE Corp Executive Vice- President Adam Zeng Xuezhong, who is also chief executive of the mobile devices division at the global telecommunications equipment provider.
“We are expecting considerable revenue growth from smartphone sales in 2016, and now targeting a worldwide shipment of between 60 million and 70 million (handsets) next year,” Zeng told China Daily in an exclusive interview at the company’s Shenzhen headquarters.
Handsets with the ZTE logo are nothing new for Chinese mainland consumers as these have been ubiquitous at outlets of domestic telecom carriers for several years now. Every year, ZTE would produce nearly 100 varieties of handsets boasting various designs and functions for the three largest operators in the country — China Mobile, China Telecom and China Unicom.
But since 2014, when the telecom manufacturer made up its mind to transform the model for its mobile segment from business-to-business (B2B) to business-to-consumer (B2C) services provider, the first step it took was to draw a clearer line of demarcation from its once closely bonded Chinese operators.
“ZTE, in a true sense, was not even an OEM (original equipment manufacturer) of handset makers, let alone a phone brand, back in the old days, as we only followed the ‘white paper’ provided by the operators and manufactured handsets for them,” Zeng recalled. “We did not need to care about the needs of consumers at all.”
Cut to 2015, and consumer needs are now the whole world for the company, as ZTE has repositioned itself as a consumer-oriented smartphone brand, according to Zeng.
As the first course of action to realize this goal, the company decided to scale down production lines by offering only two series of smartphones, “Axon” and “Blade”, featuring fully distinct specifications, in a bid to target a variety of consumer groups globally.
Zeng said the company surveyed more than 6,000 consumers from the Chinese mainland to the United States to understand what they seek from their smart handsets, and he believes the company’s Axon global flagship series — which first hit the shelves in July 2015 — are real user-centric products primarily tailormade for business people.
While Axon phones are priced between 2,000 yuan ($308) and 4,000 yuan on the Chinese mainland to target the mid- to high-end domestic market, tags for the Blade series range around 1,000 yuan as it aims to capture the attention of buyers seeking affordable options.
Counting the “Nubia” brand produced by a subsidiary, ZTE currently owns three smartphone series, which Zeng abbreviates as the “NBA” series, taken from the initial letters of Nubia, Blade and Axon. Plans are to push these brands by introducing upgrades every year.
“We used to depend on carriers to plan our products, but now we only offer some light customized features when launching our own smartphone brands in the carrier market,” he emphasized.
ZTE smartphones no longer stand for just “handsets assembled by ZTE” as in the past. However, even though the company has put enormous efforts into boosting its presence on various Chinese e-commerce platforms, such as JD.com, Alibaba’s Tmall marketplace and its own online store, Zeng admits that the importance of operators should not be underestimated, as only some 20 percent of smartphone sales take place through e-commerce and online platforms on the Chinese mainland these days, with operators and brick-andmortar stores splitting the rest.
“For example, China Mobile owns more than 500 outlets in Guangdong province alone. These are some of the best resources we should make use of to boost sales,” said Zeng.
ZTE’s mobile devices segment chief exudes unshakable confidence on aspects ranging from appearance to functions and performance — citing close consumer interaction and strong research and development as well as a growing arsenal of patents.
However, the telecom equipment maker is nevertheless grappling with its relatively low brand awareness in the smartphone market, where peers Huawei and Xiaomi are able to sell 100 million and 75 million handsets per year as they jostle for the top spot.
Zeng said the glittering sales data of ZTE Corp’s overall business will continue to provide potent support to the growth of its mobile devices division, which plans to double its annual marketing expenditure for the next three years in a bid to ensure better consumer exposure.
Promotions and advertisements for its flagship Axon models are plastered all over Chinese mainland airports and subways, as well as on various online media platforms, something never seen in the past, according to Zeng.
And brand promotion through popular sports events will be further enhanced as sports fans tend to be potential buyers of ZTE phones.
The company will also continue to work with the US National Basketball Association (NBA) to lift its brand awareness worldwide, Zeng said. Counting its newly inked sponsorship deal with legendary NBA teams the Chicago Bulls and Cleveland Cavaliers, and renewed contracts with the New York Knicks, Houston Rockets and Golden State Warriors in 2015, ZTE now has five major NBA teams in its basketball sponsorships kitty.
For Zeng, the game is now officially on.
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