Nokia's China Adventure - Blueprint for brand success?
Apart from China's highly lucrative business opportunities, one of the features of the Chinese market that gets reported regularly in the global media, is how Western companies find it difficult to crack into the market and survive and thrive. There are many examples of Western companies and brands trying to establish a strong base in the Chinese market but failing such as eBay, NewsCorp, and even Starbucks. But one of the global icons has managed to beat the odds and establish a near strangle hold on the Chinese market.
This success is of Nokia's. The world's number one mobile phone company has established itself as the market leader of the mobile phone industry in China. By commanding a 35.3% of the market as of the last quarter of 2007, Nokia is ahead of its nearest competitor Samsung by 22.1% (Samsung's market share is 13.2%). Not only that, China has emerged as Nokia's largest mobile phone market with a year-on-year sales up by 38.6%, with Nokia selling 70.7 million phones last year.
Such a phenomenal success brings to focus Nokia's branding strategy in a tumultuous market such as China. The resurgence of Samsung, Motorola and LG in the global markets has been well recorded. So much so, that Nokia was blamed by many for its complacency and for not having checked Samsung's rise in the mobile phone market. But the picture in China seems totally opposite.
Nokia seems to have refocused on two key areas: distribution and investment in R&D. Nokia's earlier preference was to establish tie ups with national distributors with a goal to gain a national presence. But recently, the company's sales head revealed that Nokia now has decided to go with regional distributors in order to solidify its position on region by region basis. Secondly, Nokia seems to have made considerable investment in R&D in China itself so that the Chinese market does not end up being just a cheap manufacturing base. Such a commitment seems to have paid well in sustaining the Nokia brand.
Even though the story so far has been very encouraging to Nokia, it remains to be seen whether Samsung can leverage its Asian identity to sneak into Nokia's strong hold on the Chinese market. The focus must be for the executive management team to focus heavily on brand building and distribution.
This success is of Nokia's. The world's number one mobile phone company has established itself as the market leader of the mobile phone industry in China. By commanding a 35.3% of the market as of the last quarter of 2007, Nokia is ahead of its nearest competitor Samsung by 22.1% (Samsung's market share is 13.2%). Not only that, China has emerged as Nokia's largest mobile phone market with a year-on-year sales up by 38.6%, with Nokia selling 70.7 million phones last year.
Such a phenomenal success brings to focus Nokia's branding strategy in a tumultuous market such as China. The resurgence of Samsung, Motorola and LG in the global markets has been well recorded. So much so, that Nokia was blamed by many for its complacency and for not having checked Samsung's rise in the mobile phone market. But the picture in China seems totally opposite.
Nokia seems to have refocused on two key areas: distribution and investment in R&D. Nokia's earlier preference was to establish tie ups with national distributors with a goal to gain a national presence. But recently, the company's sales head revealed that Nokia now has decided to go with regional distributors in order to solidify its position on region by region basis. Secondly, Nokia seems to have made considerable investment in R&D in China itself so that the Chinese market does not end up being just a cheap manufacturing base. Such a commitment seems to have paid well in sustaining the Nokia brand.
Even though the story so far has been very encouraging to Nokia, it remains to be seen whether Samsung can leverage its Asian identity to sneak into Nokia's strong hold on the Chinese market. The focus must be for the executive management team to focus heavily on brand building and distribution.
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