Polaroid China Mobile Phone Market Research0823

1、china mobile phone market research august 2012 mobile phone market 1)what are the sales channels in china? 2)are sales driven by the carriers, or is hardware segregated from them? 3)additional details around the mobile phone market august 2012levin consulting confidential for polaroid 2 china viable

2、 market overview the mobile phone market is concentrated within the top 25 cities tier 1 markets: beijing, shanghai, shenzhen, guangzhou (4 cities) tier 2 markets: chongqing, hangzhou, ningbo, nanjing, chengdu, tianjin, wuxi, suzhou (8 cities) tier 3 markets: changchun, jinan, qindao, xiamen, fuzhou

3、, shengyang, wenzhou, xian, haerbin, fuzhou, changsha, wuhan, taiyuan (13 cities) there are 661 large cities in china 1 million people in the city:49 0.5 million 1 million people: 78 0.2 million 0.5 million people:213 0.2 million people:320 august 2012levin consulting confidential for polaroid 3 sha

4、nghai chengdu shenyang wuhan tianjin chongqing hangzhou ningbo wenzhou dalian xian nanjing suzhou wuxi fuzhou xiamen guangzhou shenzhen beijing top 25 china markets haerbin changsha changchun qingdao jinan taiyuan august 2012levin consulting confidential for polaroid 4 where do people shop? the mobi

5、le phone channel divide: traditionally, mobile phones and related products are sold through separate channels of distribution when shopping, consumers go to ce retailers and category- specific destinations mobile phone category-specific destinations are very different from ce destinations as the sto

6、res only sell mobile phones and mobile phone products (so many brands, functions and outlooks) consumers will only shop when there is a need to purchase; the pricing differences between the different channels is very small the divide is blurring now that all major ce chains are merchandising mobile

7、phones august 2012levin consulting confidential for polaroid 5 distribution in china key notes 1 distribution channels reach a highly diffuse market that includes: large national professional ce/mobile phone distributors (digital china, ecs) small and medium-sized regional distributors (shanghai bai

8、 yi, sheng you telecom) direct ce chain stores (suning, gome) category chain stores (the chain store only sell mobile phones, like d.phone store) special channel partners like carriers (like china mobile and china network) key notes 2 mobile phones are now sold in it malls, mobile phone specialty st

9、ores, department stores, ce chain stores, electronics stores and other retail outlets which provide varying levels of service and support key notes 3 all of these outlets are supported by different types of distributors who handle a number of brands and a wide array of product lines august 2012levin

10、 consulting confidential for polaroid 6 distribution map mobile phone vendor regional business units strategic business units distributors dealers retailers vars end users sell-in process august 2012levin consulting confidential for polaroid 7 distribution sample national distributors regional distr

11、ibutors direct ce retailers as distributors category chain stores as distributors special channel partners august 2012levin consulting confidential for polaroid 8 national distributors north china le ye jin fei hong (600 stores + sales network of national dealers) heng yuan hui tong east china sheng

12、 you telecom equipments shanghai yi bai telecom south china jun he hai guo da liang august 2012levin consulting confidential for polaroid 9 regional distributors east china shanghai city sheng you telecom equipments shanghai yi bai telecom yong yang digital technology hang zhou city chun an wen xin

13、golden sun ning bo city feng yun tian le telecom august 2012levin consulting confidential for polaroid 10 direct ce retailers as distributors in 2009, suning signed an exclusive agreement with samsung to become samsungs national distributor of mobile phones (in 2009 the specific model for the distri

14、bution was the samsung m2710c) each year samsung will give suning two to three models to distribute august 2012levin consulting confidential for polaroid 11 direct ce retailers as distributors the mobile phone counter areas in ce retailer stores august 2012levin consulting confidential for polaroid

15、12 category chain stores as distributors in 2010, samsung signed a deal making d.phone its national chain store distributor samsung phone sales make up more than 50% of d.phone mobile phone sales each year d.phone sells a monthly average of 450 units of samsung mobile phones in every individual stor

16、e d.phone was established1993, and has 1,700 direct stores and many other national network covers another 2,000 pos august 2012levin consulting confidential for polaroid 13 category chain stores as distributors august 2012levin consulting confidential for polaroid 14 d.phone sets up specific samsung

17、 counter within its high end stores as part of the partnership condition category chain stores as distributors august 2012levin consulting confidential for polaroid 15 d.phone covers a wide market from tier one cities to countryside regions. special channel partners - carrier china mobile china tele

18、com china unicom china netcom carriers are not major channels and account for a very small amount of mobile phone sales. august 2012levin consulting confidential for polaroid 16 special channel partners - carrier china mobile and china telecom dominate the mobile phone carrier format in china. throu

19、gh retail locations, they offer mobile phones with value-added services, such as purchase a certain mobile plan and receive a free cell phone the actual sales of mobile phones are very limited. the partnership between vendors and carriers are more symbolic and strategic august 2012levin consulting c

20、onfidential for polaroid 17 special channel partners - carrier due to the high prices and very few promotion activities, the sales in carrier stores are very little and very few visitors. august 2012levin consulting confidential for polaroid 18 market trends & updates the competition amongst mobile

21、brands is very fierce. at the end of july 2012, the total number of brands increased to 104 in china market, with five new brands being added since june 2012 brand attention: samsung has the largest market share at 23.5% product attention: samsungs i9100 galaxy sii surpassed the apple iphone 4s as t

22、he most popular product category attention: smart phone category attracts 95% attention rate of consumers. 3g phone category follows as the second attention on the list price range attention: rmb 1,000 to rmb 3,000 is the main price point range in china. within this range, rmb1,000 to rmb2,000 attra

23、cts most attention, as high as 33.8% in the first half of 2012, total sales of mobile phones was 195,000,000, with smart phones representing 48.66% (94,855,000 units) local brands attention rate: 25.7%, an increase of 5.3% from january 2012 august 2012levin consulting confidential for polaroid 19 br

24、and attention / purchase intention rate list no.brand attention rate / consumers purchase intention rate 1samsung23.5% 2htc14.9% 3nokia9.6% 4sony ericsson 8.0% 5motorola7.4% 6iphone6.8% 7other brands 29.8% august 2012levin consulting confidential for polaroid 20 product attention / purchase intentio

25、n rate list + specification details no.brandmodel go-to- market time screen size operation systemprice 1samsungi9100 galaxy sii(16gb)2011.74.3android os 2.3￥3,160 2appleiphone 4s(16gb)2011.103.5ios 5.0￥4,610 3samsungi9300 galaxy siii2012.54.8android os 4.0￥4,300 4samsungi9220 galaxy note2011.95.3and

26、roid os 2.3￥4,070 5htcg23 one x (s720e)20124.7android os 4.0￥4,300 6sonylt26i20124.3android os 2.3￥3,250 7htct328w2012.34android os 4.0￥1,800 8sonylt18i2011.84.2android os 2.3￥2,300 9htcg1820114.3android os 2.3￥2,200 10xiaomi (mi)m1(miui)2011.104miui android￥1,999 11meizumx 16gb2012.14android os 2.3

27、￥2,399 12oppox907(finder)2012.74.3android os 4.0￥2,498 13samsungs5830(galaxy ace)2011.13.5android os 2.2￥1,350 14nokian9(16gb)2011.93.9meego￥2,600 15appleiphone 4(8gb)20113.5ios 4.0￥3,650 august 2012levin consulting confidential for polaroid 21 camera pixel attention / purchase intention rate list n

28、o.pixel level attention rate / consumers purchase intention rate 18 million47.1% 25 million34.7% 33 million7.7% 42 million3.5% 512 million5.6% 6other pixel1.4% august 2012levin consulting confidential for polaroid 22 screen size attention / purchase intention rate list no.screen size (inches) attent

29、ion rate / consumers purchase intention rate 1bigger than 4.0 29.2% 23.3 4.051.8% 32.9 3.210.2% 42.4 2.84.9% 5smaller than 2.4 4.0% august 2012levin consulting confidential for polaroid 23 different category average price list no.mobile phone categories average price (rmb) 1total market1,708 2smart

30、phone2,101 33g phone2,025 august 2012levin consulting confidential for polaroid 24 different brands models number list no. brandscurrent on sale models number 1samsung106 2htc77 3nokia94 4motorola68 5iphone12 august 2012levin consulting confidential for polaroid 25 appendix: mobile phone gray market

31、 august 2012levin consulting confidential for polaroid 26 chinas black market is a broad spectrum that includes multiple shades of gray. three categories of gray / black phones definition: 1.the smuggling of brand-name handsets from hong kong and other developed markets that are then sold through il

32、legitimate channels 2.“minor-branded” phones sold without legitimate network certificates 3.refurbished and counterfeit phones, usually based on electronics taken elsewhere and fitted with a new exterior. consumers can buy pc boards and cases on the street and then assemble the counterfeit phones th

33、emselves three categories august 2012levin consulting confidential for polaroid 27 the black markets share of the total is stabilizing, but its internal dynamics are shifting as more local oems become capable of building their own handsets, the number of refurbished and counterfeit phones are decrea

34、sing as a proportion of the total, while the percentage of smuggled handsets and minor branded phones are on the rise international suppliers and distributors need to be careful when considering these types of market opportunities and be aware of the big risks in doing business with these illegal ma

35、kers market trends august 2012levin consulting confidential for polaroid 28 one hotbed of black-market activity is shenzhen, which enjoys “proximity to hong kong and an established handset production base” a typical player in shenzhen with some 30 employees can turn out 50,000 units per month, and 1

36、2 models a year the operations tend to purchase boards from design houses, completing the mechanical and industrial design themselves the players produce both minor-branded phones without network certificates and branded handsets under borrowed licenses they usually provide after-sale services throu

37、gh distributors hotbed for black market shenzhen (general) august 2012levin consulting confidential for polaroid 29 shenzhen (small factory) august 2012levin consulting confidential for polaroid 30 shenzhen a huge retail market of black/gray (counterfeit type) handset at huaqiang north road august 2

38、012levin consulting confidential for polaroid 31 for example, a nokia counterfeit phone is priced at rmb700 (usd100) while the original phone is priced at rmb3500 (usd500). shenzhen a huge retail market of black/gray (counterfeit type) handset at huaqiang north road august 2012levin consulting confi

39、dential for polaroid 32 95% counterfeit phones are manufactured in shenzhen and dongguan, two big cities in guan dong province of south china well-established manufacture chain from phone-designing, raw material supply, components production and assemble, final testing there are more than 100 variou

40、s sized manufacturers producing counterfeit phones. the smallest operation could consist of 7-8 workers in a rented residential apartment, while the larger operations are oem manufacturers who produce the international and local brands. more than 90% of the counterfeit or minor-branded phones are pr

41、oduced by professional oem factories, which is a surprising and sad truth the average industrial cost for a black phone (counterfeit or minor branded) is around rmb300 (usd43) with the extremely competitive industrial cost advantage, black manufacturers, distributors and dealers are very keen to cop

42、y every single popular model of different international and local brands counterfeit phones where? august 2012levin consulting confidential for polaroid 33 purchase design map and solution from mobile phone development companies, which are called “design houses” in this black phone industry use lase

43、r technology to mass-copy the circuit board with electronic components and integrated software. this is the most expensive part of the fake product, which normally costs around usd23.00 per circuit board. most circuit boards are equipped with mp3, mp4 and digital camera functions produce mold and tooling for plastic shell of fake phones. the cost for every plastic out-shell of counterfeit phone is around usd0.08 per unit all the rest components of phone-screen, charger, digital camera, keyboard, and plastic buttons cost an extra usd0.1