Chinese phone cos lose market on premium play

The marketshare of top Chinese handset brands such as Oppo, Vivo, Realme and Xiaomi has eroded dramatically from their heights three years ago, The Economic Times has reported, attributing the phenomenon to the companies turning focus to the premium segments following declining demand in the mass segments and increased government vigil on these companies.

Data sourced from IDC and TechArt showed that the market share of top Chinese companies shrunk from 77% in Q1 of FY20 to 61% in Q2 of FY23. The fall took place at a time period when the share of global brands such as Apple and Samsung and a few smaller handset makers from China shot up from 17% to 27%.

Chief analyst at TechArt Faisal Kawoosa told the newspaper that the lure of the premium segment has cost the top Chinese phone manufacturers their market share. They have turned their focus away from the budget segments to the premium slice of the market in search of higher margins. He asserted that it has helped the smaller players such as Nokia, Lava, Motorola and Tecno to secure their foothold in the market.

In Q1 FY23 emerging Chinese company Transmission occupied the sixth position in the market with a share of 7%. This brand has priced its handsets in an affordable range.

Mass market brands such as Tecno and Itel have been instrumental in helping Transmission gain market share. While Tecno and Itel are available in offline stores, another brand of this company that is sold through online mode is Infinix.

Once a formidable player, Motorola has been gaining market share over the past few quarters. With a slew of affordable 5G handsets, it is emerging as a competitor to Redmi and Realme.

However, Counterpoint, another data cruncher in the mobile phone industry, has a slightly different set of numbers related to market share. It said that in 2021 the cumulative share of Chinese brands stood at 76% which was its peak. But in Q1 of FY23, it climbed down to 73%. Counterpoint estimates that it will decline to about 70% in FY24.
Counterpoint also said that Samsung, Xiaomi, Vivo, Oppo and Realme constituted the top five brands in India and their total market share amounted to 54% in January-March quarter. It stood at 64% a year earlier.
The fall in share was triggered by a drop in shipments of Realme ans Xiaomi, Counterpoint said.
TechArt’s Kawoosa was of the opinion that the cumulative share of Chinese brands would stay around 70% for a few years while the market will inexorably move towards the premium end of handsets.
Itel happens to be the largest feature phone brand in the country.