Nokia looks to online sales to revive fortunes

Finnish mobile phone manufacturer Nokia Corp has adopted an aggressive method to revive its Chinese market performance by cooperating with e-commerce websites and expanding its online sales.

The company signed a strategic cooperation agreement with Chinese online retailer 360buy.com on Thursday. The latter agreed to procure 2 billion yuan ($320 million) worth of mobile phones from Nokia next year.

The Chinese company is the second-largest business-to-customer e-commerce retailer in China, having annual sales of 30.8 billion yuan in 2011.

Nokia will also introduce Nokia 2050, the first Nokia device sold only through online channels in China, said Gustavo Eichelmann, chief executive officer of Nokia China, at a Beijing news briefing on Thursday.

"Online shopping is booming in China," Eichelmann said. He emphasized the importance of e-commerce, but said Nokia will not open its own mobile phone e-store, a move which Chinese rivals Xiaomi Corp and Huawei Technologies Co Ltd have already taken.

"Nokia will strengthen cooperation with third party e-commerce websites," Eichelmann said in an early December interview with China Daily. All future Nokia devices will sell through online and offline channels in China simultaneously, Eichelmann confirmed.

Wang Xiaosong, vice-president of 360buy.com, said that about 3,000 units of Lumia 920, Nokia's latest smartphone with the Windows Phone 8 operating system, had been ordered the first day the product landed on 360buy.

China is Nokia's biggest single market, having a customer base of more than 200 million. However, Nokia's ranking in China's mobile phone market has been declining quickly in recent years.

Nokia had a 3.63 percent share of the Chinese smartphone market in the third quarter, down from 18 percent during the same period last year, according to the Beijing-based research firm Analysys International. Samsung Electronics topped the list with a 15.3 percent market share.

Nokia's comeback in the Chinese market demands a well-developed online sales channel, analysts said.

Many Chinese mobile phone vendors have been very successful in attracting customers online, said Deng Kuibin, deputy general manager of SINO Market Research Co.

Xiaomi Corp, a Beijing-based mobile phone manufacturer, was the first major Chinese mobile phone company to adopt e-commerce channels as its main means of product distribution.

By Aug 16, the company had sold 3.52 million Mi-One devices, the first generation of Xiaomi mobile phones. Seven out of every 10 Mi-One handsets were purchased online, according to the company.

Meanwhile, Chinese telecom operators, which distribute almost half of Chinese mobile phones through their own channels, are gradually starting to concentrate more on expanding their online reach.

China Mobile Ltd, the world's biggest telecom operator by subscriber numbers, aims to sell up to 30 percent of its customized mobile phones through e-commerce channels over the next three years, Ma Jingxin, deputy general manager of China Mobile Terminal Co, a mobile phone subsidiary of China Mobile, said in an earlier interview.

About 30 million mobile phones are expected to be sold online in China this year, up 68 percent from 2011, according to a report issued by SINO Market Research. The growth rate is more than 10 times that for mobile phones that were sold in offline outlets during the period, the report estimated.

shenjingting@chinadaily.com.cn

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