16 May 2016
China has been a crucial smartphone market for almost every smartphone brand regardless of being an International or local one. The country has a population of billions with customers even willing to pay for premium phones, especially in major cities. However, there have been various reports suggesting that these cities have reached the saturation level.
While the bigger brands like Apple and Samsung have primarily focused on the big cities in their marketing campaigns, the smaller and local players like Oppo and Vivo are trying to capitalize by focusing on lower-tier cities. As per Reuters report, there are more than 600 such cities with a few of them even bigger than European cities. The interesting bit of stats is that these cities account for over 56% of share when it comes to overall consumption in China.
The consumers living in these cities are said to be more attracted towards cheaper phones and the local player providing them with exactly what they are asking for and also running marketing campaigns to garner sales as much as possible. For example, the Oppo R7 was launched recently with the marketing campaign touting it as the "selfie expert." As for the Q4 2015, Oppo and Vivo had a market share of 9% and 10% with fourth and fifth rank in the Chinese market. If you compare it with the market giants, Apple has a share of 13%. So, the difference is not huge.
It is clearly visible that the local players like Oppo and Vivo are reducing the gap in the market share when compared with global leaders. However, Chinese smartphone market is highly competitive one with a continuous switching of ranks among brands. In that case, it will good to see if local players will continue to show the same rate of growth for a longer time in the future.