Online sales boost success of mobile phone companies(2)

Benefits, challenges

The current change in China's marketing of mobile phones may have results beyond people's expectations, analysts said.

Cheney Ji, telecom analyst with KPMG China, said online mobile phone retail is going to introduce some big changes to the industry. Supported by e-commerce channels, mobile phone makers may have the capability to provide customers with personalized products, he said.

"The traditional offline channels have a natural limitation for mobile phone vendors - they are only able to offer standardized products and cannot know about clients' diversified demands," Ji said.

In the future, if online sales increase in China, device sellers will have an in-depth understanding of customers' requests through direct communications and are likely to differentiate their products to cater for detailed segments of the population, he said.

Xiaomi may probably set an example, as the company holds trials to sell cell phone-related peripheral products on its website, including a cartoon mascot, colorful handset cases and T-shirts. The next step for Xiaomi may be to offer tailored mobile phones, Ji said.

The other benefit of online retail is the greatly expanded reach of customers. Latecomer companies such as HTC could benefit most from the e-commerce business, as it lags behind Samsung Group and Nokia Oyj in its number of physical stores, but online outlets may help HTC narrow the distribution gap with its rivals.

"The online platform can easily reach customers in tier 2, tier 3 cities, areas where HTC has not much presence," said Ray Yam of HTC.

For domestic rivals such as Huawei and ZTE, which hope to become international brands, the e-commerce platform may help them gain bigger market shares outside China.

However, challenges do exist with the process of going to the Web.

Wang Ying, analyst with Beijing-based research company Analysys International, said online marketing will further shorten the product life span and amplify pros and cons of every mobile phone model.

"The e-commerce platform is not only a sales outlet, but also a place for branding and conveying product information to customers," Wang said. Mobile phone players are very likely to be pressured by online opinions, she said.