China’s ZTE eyes No 3 spot in European smartphone market

Shenzhen-based smartphone maker ZTE is focusing on sports marketing to increase its brand awareness in Europe and is designing products tailored to the European market as it eyes the No 3 spot on the continent.

In Spain, which is one of ZTE’s largest European markets, the Chinese smartphone maker is already within the top 3 smartphone brands with close to 8 per cent market share for the month of July, beating US smartphone giant Apple, according to market research data provided by ZTE. The company registered only about 2 per cent market share in April last year. Samsung and Huawei rank No 1 and 2 respectively, with over 25 per cent market share each.

To attract more European users, ZTE unveiled a new Axon 7 Mini smartphone during a launch in Berlin last week – a mid-range device costing €299 (US$334) that focuses on audio quality. ZTE partnered with audio technology company Dolby to incorporate hi-fi Dolby Atmos technology into the Axon 7 Mini, a feature it said was tailored specifically to the preferences of European consumers.

“European customers place a higher emphasis on the audio experience from their smartphones ... we find that many of them listen to music when exercising,” said Adam Zeng, chief executive of ZTE mobile devices. “They want good products that are affordable, and the Axon 7 Mini was designed with the overseas market in mind.”

Unlike its predecessor, ZTE’s Axon 7 flagship device which first launched in China in May, the smaller 5.2-inch Axon 7 Mini will debut in European markets such as Germany, Spain, Poland, Russia and the US starting Wednesday.

Zeng added that ZTE is likely the fastest-growing smartphone brand in Europe at present, and it aims to enter the ranks of the top three smartphone brands in Europe through an increase in brand awareness and by expanding its sales channels through both retail outlets and mobile operators.

Collectively Spain and Germany, ZTE’s largest European markets, account for about 30 per cent of its smartphone revenue in Europe, according to the company. ZTE expects to reach handset revenues of 3.5 billion yuan in Europe this year.

“Previously, we were just a white-label brand in the European market,” said Fan Yijing, terminals project director for ZTE Spain, adding that the company has since shifted its focus to target European consumers directly with its affordable, mid-range ZTE handsets.

But much of the company’s growth and branding also comes from its sports marketing strategy. In February, ZTE signed a sponsorship deal with Spain’s Sevilla Football Club, and in May sponsored the German Bundesliga football team Borussia Mönchengladbach.

“Sports marketing is a major approach [to increase brand awareness in Europe],” said Fan, acknowledging that sponsoring football teams has played a major part in promoting brand recognition in the region. “Many Europeans are crazy about football, especially in Spain.”

Fan said that one of the challenges for Chinese smartphone brands like ZTE in Europe is the stereotype that Chinese brands are low-cost and low-quality, although that perception is slowly changing.

“ZTE may have our factories in China, but we are a global company. We have design houses in Germany and USA, and an R&D centre in the US as well,” Fan said. “We are not just made in China.”