IDC : Huawei takes lead in China smartphone market, Xiaomi is rolling down the hill
Huawei has officially taken the lead in Chinese smartphone market (according to IDC) with 17.2% market share in second quarter of 2016. Oppo and Vivo took the second and third spot. Xiaomi, the leader last year (during same quarter) registered massive loss in marketshare and fell from summit to fourth spot. This is despite Xiaomi bombarding the market with phones like Mi5, Redmi 3S, Mi Max. Apple too fell from third spot to fifth due to poor sales of iPhones. We do expect Apple to register good growth as they are set for iPhone 7 launch next month but for Xiaomi, there is no respite. Good thing is that the Chinese smartphone market grew 4.6% this time. Apple and Xiaomi are the two brands among top five to register negative growth.
“The success of Huawei, OPPO, and vivo in the market can be attributed to their concerted effort to build their brand and aggressive marketing to attract the consumers, along with the focus on product differentiation,” says Xiaohan Tay, Senior Market Analyst, Client Devices Research, IDC Asia/Pacific.
“In the past, Xiaomi started the trend of selling its phones online and other vendors soon followed suit and created their own online brand. After vendors witnessed OPPO’s success with its R9, they also started riding on the trend of hiring celebrity endorsers to represent their brand and appeal more to the young crowd,” adds Tay.
“Hiring celebrity endorsers may help increase numbers in the short-term, but this alone may not be sufficient to drive numbers in the long run. As there is very little differentiation across products to warrant significant brand loyalty, vendors must constantly think out of the box to get people hyped up about their products,” ends Tay.
The story continues. Oppo and Vivo, thanks to strong offline market presence continued to register massive growth. Oppo grew by 124.1% while Vivo grew by 74.7%. Given the rise of these two brands, Huawei has to be more aggressive and expand their retail and offline presence. Both the brands have also been very active in sponsoring major sporting events in South Asia. Huawei, on the other hand is going the innovative way and is trying to capture the high end and upper mid range market by releaseing Camera centric, Nexus and other premium phones.
Samsung has already lost out in top 5 in China, even though the new Galaxy flagship phones were a big hit everywhere and this shows that when there are regional brand that create strong models, the external player’s presence is severely nullified. As for Xiaomi, the of road will come sooner if they do not come out of their shell and start opening up sales and production. Unless they come of this illusion that ‘word of mouth and flash sales is the way to go’, they are going to end up limited to accessories like smart bands and power banks.
