Top China Vendors Consolidate Share in Emerging Southeast Asia Smartphone Market in 2016
21 Feb 2017
KUALA LUMPUR, 22nd Feb 2017 - According to the latest International Data Corporation (IDC) Quarterly Mobile Phone Tracker, total smartphone shipments in the emerging Southeast Asia (SEA) region in 2016 recorded approximately 101 million units, or a 4.3% year-over-year (YoY) growth versus last year. Samsung maintained its pole position in the emerging SEA smartphone market, with 23% market share in 2016. However, its market share was cannibalized by China’s top three players, OPPO, Huawei, and vivo, which combined for a 21% market share. IDC categorizes Indonesia, Malaysia, Myanmar, Philippines, Thailand, and Vietnam as emerging markets in SEA while Singapore is classified as a mature market.
These China smartphone vendors continue to increase their penetration into SEA and now accounts for one-fifths of the total SEA smartphone market in 2016. Various factors have contributed to the success of each brand although aggressive marketing activities were the common element.
- OPPO, being half a decade old in SEA, has become one of the leading vendors by investing heavily in its marketing activities and incentivizing its resellers. It standardized its marketing approach across countries, mainly relying on local celebrities as brand ambassadors to promote itself as an “aspirational/trendy” brand and targeting mainly the millennial crowd.
- Huawei is one of the oldest players in the region, with roots in operator partnerships. It has improved its reputation over the years as it progressed to providing handsets that have undergone significant improvements to its quality and build. Similar to OPPO, its marketing approach is standardized across the region; however, Huawei makes use of international ambassadors rather than local ones. Moreover, Huawei focuses more on the features and quality of its key flagship models in its marketing as opposed to relying on the star power of celebrity endorsers.
- vivo, a contender from the same parent company as OPPO, BBK, has been following the same approach as OPPO, within and outside China. However, it had a slower start in SEA as it faced various challenges, mainly inventory management and competition from OPPO. Its growth was slow and gradual as it played itself up as a global brand initially by appearing in international movies and having Caucasian models in its ads. However, toward the end of 2016, vivo started to use local celebrity ambassadors as well for its marketing for better familiarity among locals.
These three vendors’ products have unique attributes that they promote a lot in their marketing initiatives. OPPO and vivo would highlight their “selfie”-specialized handsets such as OPPO’s F1 series and vivo’s v5 series, targeting enthusiastic self-shooters. Huawei, on the other hand, accentuated the photography quality of its device, namely the P9 series, targeting photography enthusiasts. Furthermore, the three vendors’ marketing collaterals would be placed in highly populated cities and areas with high human traffic.
As these China-based vendors strengthen their positions further in the region, local vendors and lesser-known ones are getting squeezed as their sales and brand strength weaken, combined with component shortages impacting the smartphone supply chain in 2016H2. The component supply shortage is expected to continue for the rest of 2017H1, affecting some of the local and lesser-known vendors. Manufacturers are required to be cautious with their supply distribution in order to cope with orders coming from top China-based vendors and several global players that are already ramping up their orders in preparation for the release of new handsets in 2017 across the globe.
“As the smartphone market matures and replacement demand becomes the key driver particularly in urban areas, vendors that cater to customers’ expectations of a better experience are more likely to succeed. Both China-based and global players will remain focused on the midrange and high-end smartphone segments while local and lesser-known vendors that operate on a smaller scale will begin to have their share in urban areas eroded, which will lead them to pay more attention to rural areas where their lower price points will have a better competitive edge,” says Jensen Ooi, Market Analyst, Client Devices, IDC Asia/Pacific.
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