Pepsi's Mobile Phone: What Were They Thinking?

It Might Be a New Way To Deliver Branded Entertainment to China's Consumers

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A 2013 poster uses Chinese stars to advertise PepsiCo products in Kunming in Yunnan Province, China.
A 2013 poster uses Chinese stars to advertise PepsiCo products in Kunming in Yunnan Province, China. Credit: Nelson Ching/Bloomberg

Pepsi has confirmed it's working with a licensing partner on a line of mobile phones and accessories for China. A lot of commentators find this baffling. But frankly, it's less weird than some other products that have sold in China with a Pepsi logo. Local e-commerce platform JD.com is currently offering a large selection of Pepsi-branded socks.

Pepsi, with its focus on youth culture, wants to reach China's mobile-addicted under-25 set. A Millward Brown study last year found that Chinese people spent 170 minutes a day on their smartphones, double the time they spend watching TV.

China has 525.8 million active smartphone users, according to eMarketer – and that's only 38.6% of the population, so there's room to grow. "Pepsi has always moved at the speed of culture, and today technology is a key cultural pillar at the heart of consumer interaction," PepsiCo said in a statement about the phone.

The brand still hasn't said much else about its smartphone plans. So it's not clear if they'd just be phones with a Pepsi logo on them, or if they might be loaded up with apps featuring branded entertainment content, a huge focus of PepsiCo in China.

For years, the company has worked with some of China's biggest stars on songs and filmed mini-movies to release for the Lunar New Year. That annual campaign, called Bring Happiness Home, has sometimes had over a billion views. That's got more reach than branded socks.