A ZTE smartphone in front of a poster of NBA players. (Photo/Xinhua)
Leading Chinese mobile phone vendor ZTE announced in Beijing on Oct. 15 that it has entered a three-year partnership with National Basketball Association (NBA) China, under which the manufacturer will act as NBA's smartphone partner in the Chinese market.
More than a week ago, ZTE also announced an endorsement deal with Houston Rockets' forward Chandler Parsons, reportedly worth US$1 million.
This is the company's highest promotional bid in the overseas markets so far, along with its partnership with the Houston Rockets on US soil. But why does the company want to spend so much money sponsoring the NBA?
ZTE is at a critical juncture in its brand transformation, said the Beijing-based Business Value Magazine.
For a long time, it has laid down a solid foundation in the B2B (business-to-business) market, but has not performed well in the B2C (business-to-customer) market and now wants to focus on the B2C and high-end markets beginning in 2013. Collaborating with the NBA is one of the major steps involved in that process.
The magazine further said that the company chose the NBA because then it could target both the Chinese and US markets, which it has marked as vital to operations. But can this cooperation with the NBA help the company reach new heights? The outlook may not be as bright as anticipated.
The first question that comes to mind is whether consumer electronics are suitable for such marketing. The most successful example is Samsung using the 1988 Seoul Olympics to popularize its brand internationally. But today's social and economic situation is drastically different from two decades ago. Whether ZTE can achieve the same results is uncertain.
Another factor worth considering is that since Yao Ming — the first Chinese star to break into the NBA — retired in 2011 after nine seasons with the Rockets, the NBA's influence in China has greatly diminished.
Lastly, the idea of capitalizing on the popularity of another brand to boost one's own brand image has become outdated, and is considered a rather lazy approach for marketing products.
ZTE's cooperation with the NBA is an old-fashioned way of marketing, but it is still a breakthrough for the company.
Ni Fei, president of ZTE's high-end brand Nubia, stated that the company will try out multiple options in marketing next year, which will help it narrow down on the most suitable approach.