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BIZCHINA / IT Industry
Mobile phone after-sales service sees a new profit
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Updated: 2007-06-27 11:12
The mobile phone after-sales service sector has become an emerging
lucrative market in China and is set to boom in the coming years, a
research firm said yesterday.
Beijing-based CCID Consulting said the handset after-sales service sector
generated 3.19 billion yuan in revenue last year, up 16.8 percent
year-on-year, an indication that it's becoming a profit center for
manufacturers.
That marks a major departure from the traditional perception that
after-sales service, as part of manufacturers' customer service
offerings, is an internal non-profit segment, according to Jiang Lifeng,
an analyst with CCID Consulting.
The researcher forecast handset after-sales services revenue would see
compound annual growth of 19.8 percent between 2007-09 and hit 5.48
billion yuan by 2009.
The tough competition in China's handset market has boosted consumer
demands for after-sales services.
Unlike most markets elsewhere in the world, China's handset sector is
overcrowded, with about 80 manufacturers bombarding consumers with new
models each month.
According to the Ministry of Information Industry (MII), 900 new models
were launched in the domestic market in the first five months of this
year.
A shortened product development cycle has resulted in a rise of consumer
complaints against quality. A survey by CCID Consulting found 69 percent
of consumers have had their phones fixed.
Currently there are more than 70,000 handset maintenance and service
outlets in China, but most are small, local and uncompetitive.
CCID Consulting said the increasing profitability of after-sales services
would lead to an industry consolidation or the creation of some large
national independent service providers.
Besides maintenance, value-added services such as software downloads,
upgrades, refurbishing and content services are also fueling a boom in
the after-sales service market.
In 2006, 18.2 percent, or 600 million yuan, of the handset after-sales
service revenue was generated from value-added services, compared with
2.5 percent two years ago, according to CCID.
Some manufacturers might seek to outsource a part of their after-sales
services to third-party companies, the consultancy said.
"We would not outsource our after-sales services, but we are ready to
serve users of other brands, apart from our own customers," said Shi
Yuanzheng, head of domestic maker Haier's customer services.
(For more biz stories, please visit Industry Updates)
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