Set micro net text / Xu Lun
In 2015, despite the slowing growth of the domestic smartphone market and the shift towards a more saturated environment, investment in smart devices remained strong. Major players like 360 invested $400 million in Xiaomi, while Alibaba acquired 3.6 billion shares in Meizu. Suning also took stakes in Huawei, and LeTV poured HK$2.7 billion into Coolpad. These investments reflected continued confidence in the mobile technology sector.
The trend didn’t slow down in 2015. On December 31st, Suning and ZTE announced a significant investment: Suning would inject RMB 1.93 billion into Nubia. After the capital increase, ZTE would hold 60% of Nubia’s shares, Suning Rundong would own 33.33%, and Yingcai Investment would have 6.67%. Additionally, Suning Rundong would gain the right to appoint two directors to the board. This move significantly boosted Nubia’s valuation, surpassing $1 billion.
On January 20th, Suning and ZTE signed an agreement in Beijing. Zhang Jindong, chairman of Suning, and Hou Weigui, chairman of ZTE, were present and shared their views on the collaboration.
According to Zhang Jindong, this was a long-term partnership between two industry leaders—Suning, a major retail company, and ZTE, a global communication technology giant. The collaboration aimed to leverage each other’s strengths and drive innovation through “Internet Plus†initiatives, promoting industry convergence.
Hou Weigui, CEO of ZTE, emphasized that Suning is transitioning toward a cloud-based business model, while ZTE is focusing on M-ICT. Both companies see big data and cloud computing as key drivers for future growth. Through this partnership, ZTE will support Suning’s strategic goals, while also gaining valuable industry experience and solution development capabilities.
Following the meeting, both sides provided insights into what this investment means for the future. Let’s take a closer look at the benefits for both parties.
What Does Nubia Gain?
As the main beneficiary of this deal, Nubia stands to gain from four key areas:
Substantial financial backing. Of the 1.93 billion yuan invested by Suning, 39.582 million went into Nubia’s registered capital, while 1.89 billion went into capital reserves. In a competitive smartphone market, such funding provides much-needed stability and support.
Access to Suning’s vast distribution network. Suning has extensive online and offline channels, which will help Nubia reach a broader audience. With Suning’s nationwide logistics and after-sales system, Nubia can penetrate deeper into lower-tier cities. The two parties also aim to sell 10 million units through Suning’s channels within three years. Recently, Nubia’s latest Prague S model was fully launched on Suning’s platform.
Access to PPTV’s content library. Suning’s PPTV has a wealth of video content and user data. Nubia will benefit from these resources, not only in smartphones but also in emerging fields like VR, where content plays a crucial role.
Utilizing Suning’s retail data. With over 25 years of consumer behavior data, Suning plans to share insights with Nubia, helping them better understand customer preferences and improve their offerings.
What Does Suning Gain?
A gateway to internet access. Smartphones remain the primary device for accessing the web. Nubia could serve as a key entry point for Suning’s payment tools and future IoT applications.
Infrastructure support. ZTE, a leader in enterprise networks and smart city solutions, will help build stronger cloud infrastructure, including cloud desktops and big data centers. Together, they will explore the value of retail data and expand O2O opportunities.
Collaboration in smart TV and video content. With ZTE’s IPTV/OTT expertise and Suning’s rich media resources, there are huge potential for joint ventures in smart TV and large-scale video content. Emerging technologies like VR and AR will also be explored together.
Future cooperation in finance and telecom services. Both parties plan to expand their collaboration into areas like internet finance, virtual operators, and IPTV.
With a massive investment of 1.93 billion yuan, Nubia is set for a major resurgence in 2016. According to Nubia’s Li Qiang, the funds will be allocated to brand building, offline expansion, and technological innovation. This year, Nubia plans to invest heavily in marketing, product launches, and event strategies. They also aim to open 1,000+ stores and 3,000+ sales points across China to ensure full coverage.
Technological innovation will also be a priority. Nubia has already led in areas like Netcom, photography, and borderless design, and will continue to invest in R&D to stay ahead of the curve. This year, Nubia and Suning will jointly develop VR and smart wearable products. As a subsidiary of ZTE, Nubia will also work with Suning’s smart home team to explore new markets.
Looking ahead, Nubia aims to strengthen its collaboration with ZTE while leveraging Suning’s support. With ZTE’s technology and supply chain, plus Suning’s channel and content resources, Nubia is well-positioned for a second wave of growth in 2016, driving success in marketing, product development, and innovation.
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