Recently, the Anhui Provincial Administration for Industry and Commerce (hereinafter referred to as the Administration for Industry and Commerce) conducted quality inspections on smartphones on the market and found that six mobile phone brands, including Gionee, had pre-installed software that secretly collected the location information of the owners.

Although the Gionee mobile phones involved are the Gionee King Kong and Gionee S5.1pro models released last year, according to experts, since Gionee has just launched the Gionee M6, which focuses on the concept of "safety", the quality inspection results of the Industrial and Commercial Bureau will still have a considerable impact on its brand. Prior to this, Gionee Chairman Liu Lirong told the media that he would invest 1 billion yuan in rebranding.

Faced with the quality inspection results from the Industrial and Commercial Bureau, a reporter from China Business News contacted the person in charge of Gionee Media’s public relations department. The person in charge said that he was on vacation and did not know much about the matter, so it was inconvenient to respond.

In addition, many interviewees said that the domestic mobile phone market has moved from a "red sea" to a "blood sea." The fact that the Industrial and Commercial Administration named Gionee's mobile phone as having security vulnerabilities may affect its market sales. This may become the most obvious obstacle Gionee encounters in its pursuit of the top three in the domestic market.

Promote safety but encounter doubts

The biggest impact of the Industry and Commerce Bureau’s doubts is the safety label that Gionee has worked so hard to develop.

Just over a month ago, Gionee released the Gionee M6/M6 Plus mobile phone, which focuses on security and battery life. It said that the mobile phone has a built-in security encryption chip and uses hardware encryption to protect privacy from being leaked. Security labels were once considered a powerful weapon for Gionee to attack the high-end business field.

Gionee customer service told reporters that the M6/M6 Plus has a built-in security encryption chip that prevents outsiders from deciphering the encrypted files and data on the phone. If the phone is lost, the backup data can be restored through the cloud service platform or by logging in to the user center with another Gionee phone.

When a reporter asked how to ensure that the cloud platform and user center software used for data backup and recovery would not be attacked by hackers and leaked, customer service repeatedly emphasized that the platform and software were developed by Gionee itself and have a relatively high security factor.

However, Internet analyst Yu Bin said that the quality inspection results announced by the Industrial and Commercial Bureau that Gionee's mobile phone pre-installed software collected the owner's location information without authorization may have a direct impact on Gionee's brand image. After all, Gionee is now vigorously promoting its secure mobile phone M6/M6 Plus. At this time, it was exposed that other products of its products have privacy leaks, which inevitably makes consumers wonder whether all Gionee mobile phones have security risks in this regard.

In fact, Gionee has put a lot of effort into building its own brand. In an interview with the media at the end of 2015, Gionee Chairman Liu Lirong stated that Gionee strives to return to the top three domestic market positions in the next three years. To this end, Gionee will invest nearly 1 billion yuan in rebranding in 2016.

The current strong marketing of Gionee also just confirms the huge investment in maintaining the brand. Since entering 2016, Gionee has entered people's horizons with a high-profile marketing posture. By sponsoring popular entertainment programs on many TV stations, and signing international Go champion Ke Jie, famous director Feng Xiaogang, and famous actor Shawn Yue as brand spokespersons, Gionee is trying to conquer consumers with its safety and battery life features.

Regrettably, the fact that Gionee's mobile phone was found to have secretly collected the owner's geographical location information without the owner's consent, resulting in privacy leakage, may make the industry's efforts to "invest 1 billion yuan in rebranding" in vain. This will be a big blow to Gionee.

It may affect market sales

Once the brand image is damaged, the most direct consequence is a decline in sales.

Both mobile phones released by Gionee last year had privacy leak issues. Will other models of Gionee phones also have similar problems? The root cause of mobile phone privacy leaks is that pre-installed software has the authority to obtain geographical location information without the owner's consent. So, do other mobile phones from the same manufacturer have such software pre-installed?

The reporter called and wrote to the public relations department of Gionee Media regarding the above issues, but as of press time, no reply has been received.

Experts said that consumers may turn their concerns into actions due to concerns about privacy leaks, thereby reducing or no longer purchasing Gionee mobile phones. This is not a good thing for Gionee's current promotion of "security encryption chips".

In addition, in terms of competition in China's smart terminal market alone, Gionee itself is at a disadvantage. According to the latest shipment rankings of China's smartphone market in the second quarter of 2016 released by market research organization IDC, the top five mobile phone manufacturers are Huawei, OPPO, vivo, Xiaomi and Apple, while Gionee is classified as "others". Moreover, the top five mobile phone manufacturers in terms of shipments accounted for a total market share of 63.9%, which means that there are not many market opportunities left for Gionee.

In this regard, Yu Bin said that Gionee's status in China can only be regarded as a second-rate brand and has not yet entered the first echelon. In addition, it is on the blacklist of the Industrial and Commercial Administration Bureau, which makes Liu Lirong's goal of Gionee entering the top three in the market still seem far away.