According to IDC’s latest Asia/Pacific Quarterly Mobile Phone Tracker, the China smartphone market grew 5.8% YoY and 3.6% QoQ in the third quarter of 2016, with OPPO and vivo overtaking Huawei for the first time in the market.
OPPO and vivo rose because the Chinese market has evolved beyond operator and online driven channels to an offline structure that dovetails with OPPO and vivo’s strengths. IDC says there have been three growth phases in the Chinese smartphone market in recent years.
The first phase, before 2014, was when it was driven mainly by operators. Samsung, Lenovo, and Coolpad led the smartphone market then with the help of huge subsidies offered by operators. In the second phase, between 2014 and 2015, Xiaomi was one of the first vendors that rode on the e-commerce boom in China and disrupted the market by selling its phones online through its flash sales. That kicked off another trend as other vendors soon tried to follow suit and created their own online brands and sold their phones through their own websites and that of e-tailers.
The third phase unfolded this year, when the share of phones sold online has started to stabilise, says IDC. OPPO and vivo triumphed due to their strengths in the offline channels especially in Tier 3 to Tier 5 cities. That, coupled with their other strengths in marketing and advertising, helped them to see strong growth in the market in Q316. Key highlights for Xiaomi included the launch of its Redmi Note 4 and Redmi Pro in Q316.
“OPPO’s success is not something that was achieved overnight. Back in the earlier years when vendors depended on operator subsidy to grow, OPPO was clear in its direction and focused on expanding its offline channels. It also had key strengths such as its VOOC fast charging technology and in the elegant design of its phones. This, coupled with its aggressive marketing tactics, helped it succeed in the market,” says Xiaohan Tay, Senior Market Analyst, Client Devices Research, IDC Asia/Pacific.
Huawei continued its momentum with its P9, and IDC expects the momentum for Apple to pick up in Q416, when the iPhone 7 is expected to do better than the 6s.
“As the growth in online channels stabilises, many other vendors have expressed interest in increasing their offline channels. However, given the huge amount of cost involved in this, vendors need to focus on targeting key customers in specific cities or provinces where they can find their target audience. Blind expansion may eventually lead to higher risks and losses,” commented Tay.
“It is also important for vendors to focus on investments in technology, to have a key flagship product that stands out in the market. We have seen in the case of OPPO how its single product, the R9, played a huge part in increasing its shipment numbers and in getting people to talk about its brand.” In Q416, IDC expects the market will continue to see both QoQ and YoY growth and low single-digit YoY growth overall for 2016.
OPPO and vivo rose because the Chinese market has evolved beyond operator and online driven channels to an offline structure that dovetails with OPPO and vivo’s strengths. IDC says there have been three growth phases in the Chinese smartphone market in recent years.
The first phase, before 2014, was when it was driven mainly by operators. Samsung, Lenovo, and Coolpad led the smartphone market then with the help of huge subsidies offered by operators. In the second phase, between 2014 and 2015, Xiaomi was one of the first vendors that rode on the e-commerce boom in China and disrupted the market by selling its phones online through its flash sales. That kicked off another trend as other vendors soon tried to follow suit and created their own online brands and sold their phones through their own websites and that of e-tailers.
The third phase unfolded this year, when the share of phones sold online has started to stabilise, says IDC. OPPO and vivo triumphed due to their strengths in the offline channels especially in Tier 3 to Tier 5 cities. That, coupled with their other strengths in marketing and advertising, helped them to see strong growth in the market in Q316. Key highlights for Xiaomi included the launch of its Redmi Note 4 and Redmi Pro in Q316.
“OPPO’s success is not something that was achieved overnight. Back in the earlier years when vendors depended on operator subsidy to grow, OPPO was clear in its direction and focused on expanding its offline channels. It also had key strengths such as its VOOC fast charging technology and in the elegant design of its phones. This, coupled with its aggressive marketing tactics, helped it succeed in the market,” says Xiaohan Tay, Senior Market Analyst, Client Devices Research, IDC Asia/Pacific.
Huawei continued its momentum with its P9, and IDC expects the momentum for Apple to pick up in Q416, when the iPhone 7 is expected to do better than the 6s.
“As the growth in online channels stabilises, many other vendors have expressed interest in increasing their offline channels. However, given the huge amount of cost involved in this, vendors need to focus on targeting key customers in specific cities or provinces where they can find their target audience. Blind expansion may eventually lead to higher risks and losses,” commented Tay.
“It is also important for vendors to focus on investments in technology, to have a key flagship product that stands out in the market. We have seen in the case of OPPO how its single product, the R9, played a huge part in increasing its shipment numbers and in getting people to talk about its brand.” In Q416, IDC expects the market will continue to see both QoQ and YoY growth and low single-digit YoY growth overall for 2016.
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Top
Five Smartphone Vendors in PRC, Shipments, Market Share, and
Year-Over-Year Growth, Q316 Preliminary Data (units
in millions)
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|
Vendor
|
Q316 Shipment
Volumes
|
Q316
Market Share
|
Q316
Shipment Volumes
|
Q316
Market Share
|
Year-over-Year (YoY) Growth
|
|
1. OPPO |
20.1
|
17.5%
|
9.8
|
9.0%
|
106.1%
|
|
2. vivo |
19.2
|
16.7%
|
9.5
|
8.8%
|
101.1%
|
|
3. Huawei |
18.0
|
15.7%
|
17.2
|
15.8%
|
5.1%
|
|
4. Xiaomi |
10.0
|
8.7%
|
17.3
|
15.9%
|
-42.3%
|
|
5. Apple |
8.2
|
7.1%
|
12.4
|
11.4%
|
-34.1%
|
|
Others
|
39.6
|
34.3%
|
42.6
|
39.1%
|
-7.1%
|
|
Total
|
115.1
|
100%
|
108.8
|
100%
|
5.8%
|
|
Source: Asia/Pacific Quarterly Mobile Phone
Tracker, October 28, 2016. Data is preliminary and subject to change; vendor shipments are branded
device shipments and exclude OEM sales for all vendors; the "Vendor"
represents the current parent company (or holding company) for all
brands owned and operated as a subsidiary.
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posted from Bloggeroid
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