Hong Kong-listed VTech Holdings is in talks with the mainland's No 1 personal computer maker Legend Holdings and retail giants Wal-Mart and Carrefour on distributing the AT&T-brand cordless phones it makes in China, according to a source familiar with the negotiations.
Analysts said VTech, the world's largest cordless wired phone-maker by some estimations, was keen to tap Legend's extensive distribution network to help it open up the young but potentially large mainland market.
The move reflects the huge competition in the mainland's consumer goods sector, and the attempts that companies are making by forming alliances to cement their position.
The news comes after VTech's announcement on Saturday that it has been granted the exclusive right to make and distribute AT&T cordless wired phones in Greater China.
The source said VTech was under pressure to form partnerships with companies with extensive mainland distribution networks and strong brands, after China's leading electrical-appliance maker Haier and locally listed cordless and mobile-phone maker CCT Telecom signed a distribution pact in December.
Since the beginning of the year, it has seen CCT's cordless wired phones being distributed under the Haier brand by Haier-CCT Holdings, a mobile-phone and telecommunications equipment joint venture.
CCT was the world's largest producer of cordless wired phones by units, but VTech was the biggest by dollar sales as it focused on higher-end products, an analyst said.