BEIJING, June 27 /Xinhua-PRNewswire/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong: 8235.HK), recently released through its Communications Industry Research Center a report on the status and development trend of China’s mobile phone after-sales service industry in 2008.
On June 17, 2008, CCID Consulting hosts the 2008 China Mobile Phone Service Annual Conference and the Ninth China Mobile Phone Users’ Satisfaction Survey Results Release Conference. On this conference, CCID Consulting releases 2008 Annual Report on China’s Mobile Phone After-sales Service Industrial Development. The report shows that the size of after-sales service market enlarges, but after-sales service’s value needs to be improved; value-added service demands increase and demands’ decrease service out of warranty period result in the adjust of after-sales service structure; manufacturers actively improve service system value through diversified strategies; professional service providers build service brand through service quality precise and content deepening; maintenance service still needs investment and mode innovation. After-sales service’s specialization and industrialization, the diversified contents of value-added service are the development trend of after-sales service industry in next few years.
Size and Characteristics of After-sales Service Market
The Size of After-sales Service Market Enlarges. Developments in the mobile communications service market, including its gradual maturity, upgrades in product configuration and diversification in application functions, the size of mobile phone after-sales service industry has increased steadily. CCID Consulting’s research shows that China’s after-sales service industry reached 3.8 billion Yuan in 2007, up 19.1% over 2006. CCID Consulting forecasts that after-sales service market will grow rapidly during the period of 2008-2010. The size of the whole market will reach 6 billion Yuan in 2010. The compound growth rate will be 19.3%.
Figure 1: Size and Growth of China’s Mobile Phone After-sales Service Market, 2005-2010
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Source: CCID Consulting, June 2008
The Value of After-sales Service Market Needs to Be Improved. The sales volume of mobile phone market reaches 150 million sets in 2007, which excludes black mobile phones; the sales revenue has broken through 160 billion Yuan, but the size of after-sales service market is only 3.8 billion Yuan, which accounts for 2.4% of the total sales revenue. Foreign mobile phone after-sales service accounts for 6% of the total sales revenue or the household appliance after-sales service accounts for 10% of the total sales revenue. China’s mobile phone after-sales service’s share is low, which reflects the need in after-sales service enhancement.
Foreign mobile phone industry has spanned from a price competition stage and marketing competition stage. Currently, it strides forward the third stage-service competition stage. The investment of China’s mobile phone after-sales service decreases a little, after-sales service overlay network shrinks, service network cost input decrease, component inventory decrease, all of which are concrete manifestation. As for users, with mobile phone functions’ upgrade and price drop, average maintenance input decreases. As for manufacturers, as the cost of after-sales service’s has an effect to profits, operating performance and enterprise assets is recessive and hysteretic, many manufacturers have the concept of paying more attention to production, sales, research and design, neglecting after-sales market.
After-sales Service Undergoing Structural Change. In 2007, the structure of after-sales service market has changed. New service has exceeded service within warranty period and becomes the second largest after-sales service subject, whose share reaches 23.9%.
Figure 2. Structure of China’s Mobile Phone After-sales Service, 2004-2007
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Source: CCID Consulting, June 2008
Status and Characteristics of Service Industrial Chain
As for the industrial chain of China’s mobile phone after-sales service, firstly, manufacturers are still occupying the dominant position in after-sales service industry. Secondly, professional service providers have a bright future. Thirdly, carriers’ after-sales service demands increase.
Diversified Strategies actively Improve Service System Value. With the cycle of exchanging mobile phone shortening and price drop, the demands of users’ maintenance service, especially the out of warranty period continue to be shortened. Many manufacturers’ after-sales service system shrink due to financing issue, which drive mobile phone manufacturers to diversify in service modes so as to improve the value of after-sales service system.
Firstly, mobile phone manufacturers and service providers cooperate to develop extended warranty service so as to improve the income besides warranty period. Secondly, retail channel of mobile phones’ service system could play its role through exchanging of the old for the new and direct sales. Finally, mobile phone manufacturers actively develop value-added service.
Service Quality Precise and Content Deepening Build Brand Service Providers. In order to seize after-sales service industrial development opportunities, professional service providers improve specialization, brand and scale; however, as for network coverage, maintenance quality, brand influence and manufacturers resource, professional service providers’ strengths have large difference. In order to improve brand influence, many professional service providers commit themselves to improving service quality and enriching service contents.
Development Trend of Mobile Phone After-sales Service
Maintenance Service Needs Investment and Mode Innovation. Statistical data shows that China Consumers’ Association accepts 80,470 complaints in 2007; compared with 2006, the complaints are less than those in 2006, but mobile phone still has the largest complaints, which accounts for 12.3% of the total complaints. Mobile phones’ qualities and services still have dissatisfactions.
Multi-media mobile phone’s rapid popularity directly leads the high fault rate and high fitting price, which leads the increase of mobile phone maintenance cost. Considering profit, technology and fittings, high-end maintenance is still controlled by manufacturers. However, manufacturers invest limited energy to after-sales service. Thus, in order to improve service efficiency and service market, manufacturers are still looking for win-win result and high-efficient high-end maintenance service cooperative mode.
With carriers enlarging their scale of customized mobile phone and retail terminal, the questions of customized mobile phone’s ascription, maintenance management and maintenance efficiency are more and more obvious. These mobile phones’ after-sales service will directly affect customized mobile phone participators’ brand satisfaction degree. Thus, in order to guarantee users legal rights, manufacturers should pay attention to customized mobile phones’ after-sales service.
After-sales Service Specialization and Industrialization Trend Strengthen. In recent years, the value of after-sales service market is not deeply mined. Some manufacturers ignored after-sales service investment, which results in the abnormal development in the market. There are two reasons: firstly, manufacturers need to consider sales function and maintenance function, so manufacturers has large expenditure every year; secondly, users’ demands to comprehensive high quality service are higher. These demands are not only limited in maintenance service, but also consulting service and value-added service, which drive manufacturers to improve service.
Currently, there are some professional service providers in mobile phone after-sales service market, who engage in after-sales service and have strong advantage in specialty, technology and talent. Based on their country-wide service networks, powerful technical strength, rich after-sales service experience and resource integrity ability of multi-brands operation, they provide consumers professional and convenient after-sales service. Professional service providers will take part in new service mode in the future.
Mobile phone manufacturers’ after-sales service system are only satisfied with three guarantees’ service quality and standard. Most manufacturers’ service level is still low, their maintenance costs and service couldn’t satisfy with their service objects; manufacturers and sales terminals suffer from after-sales service’s high cost. Uniform and normative service company cooperation could improve manufacturers’ after-sales service, and it could effectively reduce repeated investment and resource waste. Professional and convenient service is not only consumers’ demands, but also mobile phone manufacturers’ demands, which are benefit to realize multi-parties’ win-win result and improve user satisfaction degree. Mobile phone after-sales service will become an independent industry.
Value-added Service Contents’ Tangibility and Diversification. In recent years, value-added services in Japan and South Korea develop rapidly, such as mobile phone cosmetology, which drives China’s mobile phone manufacturers to develop mobile phone cosmetology, mobile phone cleaning, numbers backup, parameter setting and accessory sales. Besides, multi-media mobile phones are more and more popular, carriers have more and more value-added services, and the demands for value-added service with content service are prosperous, such as picture, ring tones and song downloads, application software services, that manufacturers found by themselves or cooperate with content providers to set up value-added service center.
In order to strengthen value-added service advantage, manufacturers provide value-added service with tangibility and diversification. As for value-added service with tangibility, some manufacturers introduce the concept of experiencing marketing to mobile phone’s after-sales service, and set up value-added service content experience center. As for content application and interaction with consumers, users could actively take part in and experience various contents’ value-added service, which is benefit to value-added service’s promotion. As for value-added content, manufacturers try to develop new service content, service content has expanded to content interactive from traditional content downloads, such as mobile phone information insurance, mobile phone information backup, network chatting and online games.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.
Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.
For more information, please contact:
Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com
