HTC: The mainland market is important to us

"Technology News" December 5, foreign sources said, in this year's Singles Day-China recently invented to celebrate the November 11 festival, this day has become a shopping and discount carnival days-consumers only on the Chinese version of the ebay Taobao cost more than 3 billion dollars.

"I think they're talking about all the [Best Buy] sales," said Ningweiguang, president of HTC China, the smartphone maker, to the FT. The contrast may be a bit exaggerated, but in order for HTC to compete against Samsung and Apple globally, Ningweiguang is clearly keen to occupy a niche in the fast-growing e-commerce market.

As a result, China is now at the centre of HTC's turnaround operations. Ningweiguang's mission is to find new ways to develop hardware, software, and retail strategies for consumers in mainland China, and HTC hopes that sales to Chinese consumers will be enough to offset the decline in sales in Europe and the US. Stepping up cooperation with local Internet companies is also one of the most challenging aspects of China's mobile phone market for foreign companies.

Facebook, Twitter and many Google-related services are blocked in mainland China, and Chinese Internet users can only rely on local services such as Baidu to search, use Renren, Tencent Weibo to access social networking services. China Mobile, the country's largest telecoms operator, uses its own 3G technology, which is incompatible with many handsets, including all iphones that are not compatible with the latest iphone.

This forces foreign companies, such as HTC, to invest in what Ningweiguang calls "massive engineering resources" to modify their phone designs so that they can be used locally and attract customers. "It's like 2 parallel worlds," said Duncan Clark, chairman of BDA, Beijing's China Internet technology consultancy.

With its desire handsets in vogue, HTC accounts for 4.5% of the mainland market, up 0.4% from 4.1% a year ago. But even in China, Samsung and Apple still dominate the market, Ningweiguang said, which HTC is also aiming at the highest goal. This week the company will launch a series of new devices in Beijing, including the Windows Phone 8 phone and the Android phone with a 5-inch high-definition screen, J Butterfly.

Daniel Chang, a Macquarie analyst, said HTC also had the risk of losing market share to local brands as they developed increasingly high-end handsets, often at lower prices than HTC models. To that end, the company is seeking to expand its retail business – adding 1000 more stores to its existing 2,600-plus 1 years – and finding new ways to attract consumers in the increasingly competitive mainland market.

This is what E-commerce can do. HTC is working with China's largest online retailer, Ningweiguang said. He noted that it was the first handset manufacturer in China to work with local banks to develop mobile wallets that could be used to boost online payments. Some HTC phones are equipped with near-field communications (NFC) chips, which can be paid by tapping a special card reader.

HTC is also targeting Apple's other weakness. Ningweiguang said it was unclear whether China Mobile would run the iphone 5 o'clock, and HTC had signed deals with China Mobile, Unicom and the Chinese telecom, which will be sold at the same time by the three major carriers this week.