Word of mouth reaping big rewards for Xiaomi, Samsung, competitors

Overseas consumer electronics vendors are edging out domestic competitors when it comes to brand advocacy, a gauge also closely relevant to company revenue growth in China, a consultancy report said on Wednesday.

Lower word-of-mouth scores are sounding the alarm for Chinese companies-especially those with global ambitions-that it's time to change marketing strategies while their products are steadily gaining ground, said analysts.

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Price, hardware performance and design are the most looked-at areas for Chinese buyers when purchasing consumer electronics such as smartphones, tablets and smart televisions, according to the Boston Consulting Group, a multinational consultancy and publisher of the report.

The study, which gathered responses from more than 8,500 people, found that advocacy serves as a significant information channel.

Samsung Electronics Co Ltd and Apple Inc are among the most recommended choices in the country because of good device performance and aggressive marketing strategy, it said. By contrast, Huawei Technology Co Ltd, Lenovo Group Ltd and other local brands scored low, even in heavily invested markets such as portal devices and smart TVs.

Lenovo received a merely average score of 58 percent in the handset category, on par with BlackBerry Ltd, a Canadian company that doesn't have a substantial business in China.

The result was particularly bracing for Lenovo, the second-largest smartphone producer in China by market share, which recently said it would buy out Motorola Mobility for $2.9 billion.

Guangdong-based consumer electronics maker TCL Corp also came in low in the smart TV segment, while South Korean and Japanese brands dominated the top five spots, the report said.

"The brand advocacy scores from existing buyers were similar in the smart TV segment, but Chinese manufacturers failed to get a better-than-average score among noncustomers," said Li Shu, head of BCG's Beijing office.

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