The cell phone market is one of the strongest and most stabilized markets in the industry today. Nokia is a Finnish company that has been around for more than a century, and was once the largest vendor of mobile phones in the world. Unfortunately, their move into the smartphone industry was ill fated as they quickly became overshadowed by tough competitors in Apple and Samsung. Their mobile phone business has since been bought by Microsoft in a deal totaling $7.17 Billion, and has led to a creation of a new entity called HMD Global in 2016 (which still operates under the “Nokia” brand name). Though many see the smartphone business has being almost completely saturated by the sheer market dominance of Apple and Samsung, the Nokia 6 Android smartphone seems to be doing rather well currently. That statement’s foundation is built on the idea that America is not the only market for different smartphone players to thrive. In this case, Nokia has done quite well in China and has a brand appeal to the country’s consumers. Basically, does China offer another playground for products that would not normally thrive elsewhere? If so, does a specific business model drive it?
Formally announced on January 8 of 2017, the Nokia 6 has already gathered 1.4 million registrations before a second flash sale in China. The phone had garnered 2.5 million registrations just 24 hours after they opened on JD.com. What is more absurd, is that the first flash sale for the Nokia 6 saw the phone going out of stock within 60 seconds. Flash sales are the sales of goods at greatly reduced prices, lasting for only a short period of time. This business model seems to be very effective in China with its consumers, as Chinese companies such as JD.com and Vipshop thrive on this model. It seems as if the Nokia brand recognizes that they have appeal to the Chinese consumer, and have directly tailored this phone exclusive to China. But, the management levels of Nokia’s smartphone division see the crucial importance of working with established flash sales vendor such as JD.com. Nestor Xu, vice president of Greater China, HDM Global, announces his verdict on the Nokia 6:
“China is the largest and most competitive smartphone market in the world, it is no coincidence that we have chosen to bring our first Android device to China with a long-term partner. Jd.com is known for its upward mobile customer base and it has for many years believed in the Nokia brand and sold millions of our products to Chinese customers. Launching our first smartphone device, in such a strategically important market, with JD.com a trusted online retailer marks a signal of intent” (Investopedia).
Even though most Americans see the cell phone market as primarily dominated by either Apple or Samsung, this is not the case in China where multiple players exist. Hence, the main question asked is what does it take to succeed with the average Chinese consumer. Is the current success of Nokia 6 in China only possible through the company’s collaboration with flash sale vendors? Can it thrive without this business model in other countries? Data shows that mobile phone companies such as China’s Le-Eco are succeeding well in countries such as India. The flash sale model is again implemented, and the company launched their Le Eco’s smartphone in a series of three flash sales. The first sale resulted in sales of 70,000 units in 2 seconds. The second sale paved way for the sale of 95,000 units in about 20 seconds, and the third one sold about 55,000 in 9 seconds. Is the flash sale model that critical to success in China?