Chinese phone companies lose market share to premium players
Chinese phone companies lose market share to premium players
The market share of top Chinese handset brands, including Oppo, Vivo, Realme, and Xiaomi, has seen a significant erosion over the past three years, according to a report by The Economic Times. This decline in market share can be attributed to several factors, including a shift in focus towards the premium segments, declining demand in the mass segments, and increased government scrutiny on these companies.
Data sourced from IDC and TechArt reveals that the market share of these top Chinese companies decreased from 77% in the first quarter of the financial year 2020 to 61% in the second quarter of the financial year 2023. This decline coincided with a rise in the market share of global brands such as Apple and Samsung, as well as some smaller handset makers from China, which increased from 17% to 27% during the same period.
Faisal Kawoosa, the Chief Analyst at TechArt, suggests that the allure of the premium segment has cost the top Chinese phone manufacturers their market share. These companies have shifted their focus away from the budget segments towards the premium slice of the market in search of higher profit margins. As a result, smaller players such as Nokia, Lava, Motorola, and Tecno have been able to secure their foothold in the market.
One emerging Chinese company, Transmission, occupied the sixth position in the market with a 7% share in the first quarter of the financial year 2023. Transmission has priced its handsets in an affordable range, and mass-market brands such as Tecno and Itel have played a significant role in helping Transmission gain market share. While Tecno and Itel are available in offline stores, another brand of Transmission that is sold through online mode is Infinix.
Motorola, once a formidable player in the market, has been gaining market share over the past few quarters. With a range of affordable 5G handsets, Motorola is emerging as a competitor to brands like Redmi and Realme.
However, Counterpoint, another data analytics firm in the mobile phone industry, presents slightly different numbers related to market share. According to Counterpoint, the cumulative share of Chinese brands in 2021 reached its peak at 76%. However, by the first quarter of the financial year 2023, it had declined to 73%, and Counterpoint estimates that it will further decline to about 70% in the financial year 2024. Counterpoint also highlights that Samsung, Xiaomi, Vivo, Oppo, and Realme constitute the top five brands in India, and their total market share amounted to 54% in the January-March quarter, compared to 64% a year earlier. Counterpoint attributes this decline in market share to a drop in shipments of Realme and Xiaomi.
Faisal Kawoosa of TechArt suggests that the cumulative share of Chinese brands is likely to stay around 70% for the next few years, as the market inexorably moves towards the premium end of handsets. Itel, being the largest feature phone brand in the country, plays a significant role in the overall market dynamics.
In conclusion, the market share of top Chinese handset brands in India has experienced a notable decline over the past three years. Factors such as a shift in focus towards the premium segment, declining demand in the mass segments, and increased government vigilance have contributed to this erosion. Smaller players and emerging Chinese companies have capitalized on this shift, gaining market share in the process. However, it is important to note that market dynamics can vary depending on the data source, and there are differing predictions regarding the future market share of Chinese brands in India.
