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Nokia pins hopes on virtual world

By Wang Xing (China Daily)
Updated: 2009-06-08 13:17

A girl prints a hard copy of a photo from her handset at a Nokia service center in Nantong, Jiangsu province. By promoting multi-functional handsets, the Finnish cellphone giant increased profits in China despite a plunge of 96 percent in its first-quarter global net earnings.[CFP]

It's always a dilemma for consumer electronics companies to try to cut marketing expenses during an economic slowdown while maintaining revenue and consumer loyalty.

But Finnish mobile phone giant Nokia seems to have found a good solution by turning to the Internet.

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On April 19, the world's biggest mobile phone maker staged an online concert in China that was streamed live exclusively via domestic video sharing website Youku.com.

The three-hour event attracted 6.48 million visitors, Nokia said, making it one of the largest online events in the virtual world.

"This is a brand-new event and nobody has ever done that before," said David Tang, Nokia China's vice-president. "The viewer numbers exceeded our earlier estimations and the event is still being talked about."

He said Nokia's online marketing expenses currently only accounted for a small part of its total budget. "But I'm sure the proportion will increase significantly in the future," Tang said.

In order to promote its music phones, one of the company's largest product lines, Nokia has organized annual concerts in China in partnership with local television stations since 2006.

But this is the first time that Nokia has broadcast a concert on the Web, where 67.1 percent of the 298 million users are below 30, according to figures from the China Internet Network Information Center (CNNIC).

Nokia refused to disclose the cost of its online concert, only noting that it cost "no less than" previous events. Tang said although traditional concerts on TV would attract about 200 million viewers, many of them were not really interested in the event. He said all the 6.48 million online views had come online to watch the concert of their own accord, making the campaign more effective.

During the online concert, visitors could freely choose the angle from which to view it and were able to interact with the performers by sending virtual flowers and kisses.

The playbill was also decided by an online poll launched several weeks before the concert.

And during the event, visitors could call for an encore by sending short messages.

Nokia said these interactive features enable participants a greater freedom and encourage them to become active participants in the event rather than passive observers.

"Everyone now has a tight marketing budget and the challenge is how to make that money more effective," said Yeewee Koh, head of marketing for Nokia in China, Japan and Korea.

Impacted by the global economic slowdown, Nokia posted a 96 percent plunge in its net profit in the first quarter of this year and its global shipments shrank 19 percent. But its shipments to China defied the global trend, rising 39 percent compared with the previous quarter.

Experts said as Chinese telecom operators promote their 3G services, which is expected to encourage users to buy new handsets, the country's mobile phone market will continue to grow in the years to come.

That, together with the country's huge online population, make China the most important strategic market for Nokia, which is now trying to turn itself from a mobile phone vendor to an "Internet company". And all these efforts require Nokia to associate its brand with something new, funny and cool.

In fact, the online concert is not Nokia's first attempt at this sort of event. In February, the company organized first-launch events in four Chinese cities for its 5800 XpressMusic, Nokia's first touch phone that aims to compete with Apple's popular iPhone.

The events attracted great number of consumers to purchase products in Nokia's stores in Beijing, Shanghai, Shenzhen and Chengdu.

Last month, the company signed a contract with Liu Qian, the Taiwanese magician who made an impressive debut at the 2009 CCTV Spring Festival gala, to promote its products.

Koh from Nokia said his company will try more online and wireless marketing campaign in the future with the coming of China's 3G era and will put more effort into targeting specific consumer groups with novelty marketing tactics.