ZTE’s Nubia spin-off plans global expansion

• Nubia is part of ZTE's dual brand strategy to target the e-commerce segment
• Plans to launch upcoming Z11 smartphone in both China and the United States

CHINESE telecommunications equipment provider ZTE Corp may be the sixth largest smartphone maker in the world (according to Counterpoint Research), but it doesn’t plan to stay out of the Top 5 vendor list forever.

Back in June this year, the company told analysts it planned to ship 60 million smartphones in 2015 and double its shipment of premium products to make up 45% of its total smartphone shipment, and plans to be the top 3 OEMs in its key markets by 2020.

This is where its premium smartphone spin-off, Nubia Technology Co, comes in.

Similar to rival Huawei Technologies, which carry both the Huawei and Honor smartphone brands, ZTE also has a dual brand strategy.

Smartphones sold under the ZTE brand, like the recently released Axon Elite is distributed through traditional retail and operator channels, while its Nubia brand, with models like the Z9 (pic below), is aimed at e-commerce channels to tackle rivals like Huawei’s Honor and Xiaomi.

After the success of the Z9 (which reportedly achieved half a billion units of sales globally), Nubia plans to double down on international markets, in line with its parent’s goals to increase its investment in branding in the next 3 years.

In late November,  Nubia Technology’s senior vice president Ni Fei (pic, below) announced it will coincide the launch dates of its new flagship model Z11 in both China and the United States in 2016.

That seems like a bold move, especially when it delayed the release of the Z9 in the US. Despite a plan to sell that device there within the third quarter, it's still not on store shelves due to “complicated compatibility testing” reasons.

In an e-mail interview with Digital News Asia (DNA), Ni Fei, who is also the co-founder of the Nubia brand, shared his company’s product and distribution strategy, as well as global expansion plans.

(We have left the company’s spelling of ‘nubia’ unchanged)

DNA: Will Nubia be competing directly with the ZTE brand in ASEAN markets?

Ni Fei: nubia is a separate and independent brand from ZTE.  Although nubia and ZTE may overlap and coexist in certain regions, the brands and products are positioned very differently from one another and therefore should not be treated as competitors.

nubia is a premium brand offering high-end luxury smartphones whilst ZTE smartphones are priced lower and focus on different functions.

DNA: What sort of market share is Nubia aiming for and who is the target audience?

Ni Fei: Established three years ago, nubia has already proven to be a fierce competitor in the smartphone industry. nubia has successfully attracted niche audiences who are adventurous and seek the extraordinary.  These individuals are always in search for unique and innovative products and services. 

Leveraging nubia’s key strengths and product differentiators, nubia smartphones have attracted enthusiasts and elites with its high quality SLR (single-lens reflex) camera and the unique technologies that come with it.

DNA: Will Nubia attempt selling phones through physical retail channels in Southeast Asia?

Ni Fei: Although nubia has not launched any physical retail stores in South East Asia (SEA), our online sales rates have proven to drive success of our global expansion strategy.  We have very strong relationships with major e-commerce platforms such as Amazon in India, a collaboration which has proven to be a great success for nubia.
 
We are confident that e-commerce platforms will become popular and prevailing for the coming decades thanks to the ever-changing e-commerce landscape. With a strong online presence, nubia is able to reach groups of customers who seldom go to physical stores.
 
To add, we are also open to partnering with local distributors and telecommunication operators to meet the needs of consumers in different markets.
 
DNA: What is Nubia's product strategy to differentiate itself? There are so many brands and models in the market.

Ni Fei: Product innovation has been the driver to our success. Our strategy is simple; we aim to provide the highest quality designs and functions to premium smartphone models at the best value. 

As photography is our core strength, our smartphones offer professional photography experiences to consumers.  With highly advanced SLR camera functions, nubia smartphones can shoot high quality photographs of light paintings, star trails and time lapses. 

Besides high quality camera capabilities, nubia was the first to introduce the bezel-less design, FiT (Frame interactive Technology) and the all-network concept which not only captivated worldwide attention but ushered a new era for user interaction.

Many of these features were not only first introduced to the market by nubia but some technologies are also unique and patented to the brand.  

DNA: When will we see Nubia phones become widely available commercially outside of Chin?

Ni Fei: 2016 will be an exciting year for nubia, as there will be a couple of new product launches in the pipeline both domestically and internationally.  Thus far, nubia has entered Russia, India, South East Asia, Europe and South America.  Most recently, “My PRAGUE”, the first of nubia’s “My” series was made available for purchase in the Czech Republic. 

DNA: Some of your rivals have started their own manufacturing plants in countries like Indonesia and India. Will Nubia be taking the same approach?

Ni Fei: We currently do not have plans to do offshore manufacturing in SEA countries. Established in Shenzhen, China and as part of our heritage, nubia is proud to be a Chinese smartphone company. 

As innovation is core to our strategy and success, it is important that all R&D and other components of our supply chain remain highly protected and at our grasp.  With more than 2,500 patents and 200 software copyrights, nubia strives to elevate the user experience by bringing true value to customers.

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