CCID Consulting's research shows that in 2006 China's mobile phone after- sales services industry reached 3.19 billion Yuan, up by 16.8% year-on-year. In the next 3 years, the industry is expected to maintain fast growth based on the current statistics. In 2009, industry size will top 5 billion Yuan to reach 5.48 billion Yuan, with a CAGR of 19.8% between 2007 and 2009.
According to the Blue Paper, China's mobile phone after-sales services industry now mainly has the following features: industry concentration is low and there are notable regional features; repair services are still In the dominant position, while warranty repairs drops year by year; accessories sales are still under regulation and high-end repair is still mainly for firms; after-sales value-added services have risen as a fresk force, and the industry pattern is expected to change; and third party after-sales services providers have cut a brilliant figure, and pushed the industry forward.
II. Positioning of after-sales services and China's mobile phone after- sales services industry
Through its research, CCID Consulting thinks that mobile phone after-sales services should not be confined to ''Three Guarantees'' services (guarantee of repair; replacement and refund of substandard products). Instead, they should cover all follow-up services relating to mobile phone products and their use. Specifically, warranty services, non-warranty services and after-sales value- added services should be included. The traditional view that the after-sales department of enterprises is a functional department that plays an auxiliary role has been gradually discarded. CCID Consulting's research shows that in 2006, China's mobile phone after-sales services industry already topped 3 billion Yuan.
The fact has proven that mobile phone after-sales services are not just a cost center. They also can be a profit center. Meanwhile, from the industry perspective, mobile phone after-sales services are not merely a supplement to sales. They are an industry. In 2006, China's after-sales value- added services market approached a size of 600 million Yuan and showed a fast growth momentum. Meanwhile, fast-growing new services are in turn expected to stimulate enterprises to increase investment in the field. CCID Consulting predicts that in the coming few years, with the rise of such personalized services as accessories sales, software services, mobile phone beautification and virtual content operations, after-sales services will become more independent and show more notable industry features.
III. Problems and opportunities in China's mobile phone after-sales services industry
Firstly, consumers do not have information symmetry, and the market urgently needs standardized operations. CCID Consulting's research shows that there are about 100,000 channel distributors in the market at present. The number of repair services outlets is also around 70,000. Many of them are non-warranty services enterprises. Their performance varies markedly. To a certain extent, the emergence of some small services providers has facilitated users. But lack of unified and standardized qualifications, technology, accessories and charges has made it difficult for users to make choices and judgments. Meanwhile, it has also resulted in such problems as repair charge exceeding mobile phone values and worsening mobile phone quality with each repair. Compliant rate has remained high.
Therefore, the standardization and centralization of the after-sales services market require the joint efforts by terminal enterprises, repair firms and the government. Firstly, terminal enterprises are required to strengthen efforts to build standardized services systems. Under the
precondition of strengthening qualification examination and supervision over repair firms, they should provide certain profit assurance to repair firms and adopt market means to promote them to facilitate effective market competition. Secondly, the relevant authorities need to step up efforts to rectify and clear the market at the policy and supervisory levels, specify responsibilities and rights and thus promote standardized operations in the whole mobile phone after-sales services market.
Secondly, the rise of the multimedia mobile phone has stimulated consumers' demand for soft services. With the rise of the multimedia mobile phone, the market has fully entered a color screen and photo mobile phone era. Gaming mobile phones with big storage capacities and memories, MP3 mobile phones and TV mobile phones are the outstanding examples of multimedia mobile phones. With the advent of the 3G era, the multimedia mobile phone has also stimulated consumers' demand for after-sales value-added services while providing a basic hardware platform for such multimedia applications as MMS, games and video clip playing. The software services market, which mainly consists of accessories sales and value-added content services, continues to expand in size. It has become a new growth point in the services field.
However, value-added services are still mainly provided by some terminal enterprises and operators. No standardized operation models have yet formed. The market urgently needs to establish a set of sound, rapid and integrated services models to guide demand and seize the first opportunities. Thirdly, repair services face challenges and need new cooperation models.
CCID Consulting's data shows that in the last few years, the percentage of consumer complaint ratio against mobile phones has been rising year by year. In 2006, it reached 12.5%, up by almost 3% over 2004. On one hand, this is related to the higher penetration rate of mobile phones. On the other hand, it is also related to the current business models in the mobile phone after-sales services industry. At present, terminal vendors usually adopt authorized management to run their after-sales services system and strictly control the sales and high-end repair of accessories. To a certain extent, this ensures services quality. But it also restricts the development of the whole services industry. Out of consideration for profit, technology and accessories support, such an operation model directly results in long after-sales repair cycles, poor services initiatives and care, slow market response and lack of integrated services. It also restricts the development of third party services providers and affects the normal development of repair services.
To sum up, China's mobile phone after-sales services industry as a new market faces broad opportunities as well as challenges for standardized operations. How to establish professional and standardized services models on the basis of traditional services models is the key for the whole market to achieve industrialized operations. Through its research, CCID Consulting believes that as the industry matures and services extend, the rise of third party services institutions will be the key to the development of China's mobile phone after-sales services industry. Firstly, the emergencje of third party services institutions accords to the trend of industry specialization. Secondly, third party services providers are expected to integrate after-sales services market and establish reliable and stable nationwide services outlets. Thirdly, the third party services model is a win-win model of cooperation among mobile phone firms, services providers and consumers. It is in line with the general trend of the product market in the post-2G era and the virtualization of the content operation market.
