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A Sharp Focus on China’s High-end Consumers
Japan-based Sharp Corporation announced this week
that it
plans to expand in the
already-large-and-still-growing Chinese handset
market. Sharp enjoys a 40% market share in the
dynamic and lucrative Japanese market, but the
company sells few handsets outside the country. In
China, Sharp is aiming for the high end of the
market with multifunctional handsets selling for
almost $600. The company hopes to sell five million
handsets a year in China in the next few years.
Sharp sold only 15.5 million handsets worldwide in
the fiscal year that ended March 2008, so an
additional 5 million handsets would have a
significant impact on its bottom line.
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Vital Wave Consulting likes Sharp’s timing: Apple
has not yet entered the China market with its iconic
iPhone, and 3G services were rushed to market in
several of China’s largest cities just before the
summer Olympics. A phone that offers mpayment
capabilities – standard in Japan – might also
attract China’s wealthy elite. According to
one report, Chinese mobile phone users led their
counterparts in India, Taiwan, Singapore and
Australia in storing music, playing games, making
payments, and accessing the Internet. Chinese
Internet users
do not fit the same usage profile as many
Western (or even other emerging-market) users.
According to a Chinese government study, the Web is
not necessarily perceived as a means of finding
information or shopping; rather, it is seen as a
highly customizable entertainment medium. Over 70%
of Chinese Internet users are under 30, and tend to be
avid gamers, social networkers, and “fanzine”
subscribers. Handsets that allow Chinese users to
access these services outside the Internet café
could be highly sought-after.
The high end of the market (for handsets, computers,
and many other consumer electronics) is a
particularly good opportunity in China and in other
large emerging markets such as India. The percentage of the
Chinese population that
constitutes the high-end market may be relatively
small, but in a country with more than one billion
people, the total opportunity is still ample and
justifies the expense of forging new marketing and
distribution channels that target the country’s
elite.
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