Beijing Digital set to spread wings abroad

The stand of Beijing Digital Telecom Co Ltd at an industry expo last year. [Photo provided to China Daily]

China's largest mobile phone retail chain, Beijing Digital Telecom Co Ltd, announced plans on Thursday to open 3,000 stores in at least 10 countries over the next five years, to expand its business to Africa, South Asia and Latin America.

The first stop of the company's overseas expansion is Nigeria. So far, it has opened stores in Lagos, the biggest city in Nigeria, and plans to expand gradually to Port Harcourt, Abuja and other cities. In addition, it plans to expand in India as part of a general rollout across South Asia.

The company plans to open 400 stores and sell 2 million mobile phones in Nigeria and India in the first year.

"It is an irresistible trend to launch the globalization strategy. The telecom retail market in South Asia and Africa lags at least four to five years behind China, so there is huge potential," said Jin Xin, president of Beijing Digital Telecom.

"On the other hand, many well-known Chinese mobile phone manufacturers are going abroad, with the intention to become world-class enterprises, and advanced telecommunication retailers should also keep up with the trend to go international along with these manufacturers, which could reduce communication costs and enhance competitiveness," said Jin.

Nigeria and India are only the first step in the firm's globalization strategy. The company aims to enter five countries with the opening of 1,000 stores and sales of 5 million mobile phones in the third year, and in the fifth year, it plans to cover 10 countries with 3,000 stores and sell 10 million mobile phones.

Yan Zhanmeng, a senior analyst with International Data Corp, said: "Sales of mobile phones in the domestic retail market are already saturated, so retailers have to explore new markets and find business growth points."

"Nigeria is the largest mobile phone market in Africa, accounting for a 20 percent to 30 percent market share in the continent, while India is the biggest mobile phone market in South Asia, where the demand for mobile phones is big," said Yan.

He added that it is beneficial for mobile phone retailers to sell their products in emerging markets such as Africa, Southeast Asia and Latin America, compared with the European and US markets, where telecom operators dominate the mobile phone market.

Beijing Digital Telecom, which has opened nearly 1,500 retail stores, sells mobile telecommunications devices and accessories and provides value-added services.

Its sales volume of mobile phones reached about 10.63 million in 2014, a year-on-year increase of 11.12 percent. It has established strategic collaborations with China's three major telecommunication carriers and mobile phone producers such as Apple Inc, Xiaomi Corp and Lenovo Group Ltd.

However, Chinese mobile phone retailers will meet some challenges in their globalization. "How to cooperate with local mobile phone brands to capture more market share is an issue that Chinese retailers need to consider," said Zhu Dalin, an analyst at Beijing-based consultancy Analysys International.