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.

China Daily (Canada) - - HONG KONG -

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.

Con­tact the writer at li­tao@chi­nadai­lyhk.com

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