ZTE is shooting a bank shot in the hopes that its partnerships with NBA teams will help elevate its brand profile in the U.S. market. The company has tripled its U.S. marketing investment this year compared to 2013 and it is starting to see dividends, according to ZTE USA CEO Lixin Cheng.
Cheng, in an interview with the Wall Street Journal, said that the company has more confidence that it has found the right recipe to build a brand in the U.S. for its smartphone business. "The rule of our marketing investment is that, we invest in anything that can create direct interactions with consumers, either through social media or other digital media. That's why we are working with NBA teams with a focus on social media and digital media," he said.
Alluding to larger players Samsung Electronics and LG Electronics, Cheng noted that "some leading Korean brands are spending a lot of money everywhere. But our approach is different. Being a low-cost Chinese manufacturer can be a disadvantage but it can also be an advantage. People know that we can provide good products at affordable prices."
In October ZTE became the official smartphone of the New York Knicks and Golden State Warriors basketball teams, building on an existing deal with the Houston Rockets. Cheng said the deals are bringing ZTE added visibility and attention.
"In our new agreement with the New York Knicks, we will have extensive presence inside Madison Square Garden, including access to the big screen inside the arena as well as all the digital signage outside," he noted. "Inside and outside the arena, there will be 600 million people passing by annually. With Houston Rockets, we have already sold official Rockets smartphones made by ZTE. We have also featured some of the players in our promotional campaigns."
ZTE started pushing to have its own brand on smartphones sold in the U.S. earlier this year, and has also started doing more direct-to-consumer online sales in the U.S. Still, the company has a large hill to climb to increase its band presence. According to research firm comScore's September 2014 reading of the U.S. smartphone market, ZTE was not ranked among the top five U.S. smartphone makers, trailing at least Apple (NASDAQ: AAPL), Samsung, LG, Motorola Mobility and HTC.
Cheng indicated though that ZTE is in the U.S. market for the long haul. The company has spent years building up relationships with all of the Tier 1 carriers as well as smaller carriers.
"We need to be in every single important market worldwide. And the U.S. is the leading telecom market in the world. We cannot ignore this market," he said. "You cannot claim that you are a leading smartphone vendor in the world unless you have a significant foothold in the U.S. If you can build a successful brand in the U.S., that will have a good impact on other parts of the world."