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In November 2017, market research firm Gartner released its global smartphone market data for the third quarter of that year, revealing a significant shift in the industry landscape. Chinese manufacturers such as Huawei, OPPO, and Xiaomi have now joined the top five global players alongside Samsung and Apple. Among them, Xiaomi saw a nearly 80% year-on-year increase in handset shipments, with its market share rising from 4% to 7%. These figures are impressive and reflect the growing influence of Chinese brands on the global stage.
In Southeast Asia, Chinese phone manufacturers have also delivered strong performance, showcasing their dominance in regional markets. According to IDC data from 2016, OPPO secured second place in local sales with a 13.2% market share, while its shipment volume surged by 137.5% year-on-year. Meanwhile, Asustek and Huawei held third and fourth positions with 5.9% and 5.1% respectively. More recent data from Strategy Analytics, shared with the 21st Century Business Herald, showed that in Q3 2017, OPPO again ranked second in Southeast Asia with a 17.2% market share, followed by Vivo at 4.6%.
As the domestic smartphone market in China approaches saturation, expansion into international markets has become a strategic priority for many Chinese brands. Gartner’s report highlighted this trend, noting that despite a decline in China's smartphone shipments, growth in emerging Asian and North American markets helped sustain global shipment growth of 3% in the third quarter of 2017.
Comparing Q3 2016 and Q3 2017, smartphone sales in Greater China dropped from 32.3% to 27.9%, while the share of emerging Asia-Pacific markets rose from 19.1% to 21.3%. This shift underscores the increasing importance of overseas markets for Chinese manufacturers.
The saturation of the Chinese smartphone market was evident as early as 2015, when IDC reported a 4.3% year-on-year decline in smartphone shipments during the first quarter. Analysts noted that with over 90% market penetration, the Chinese market had shifted from new device purchases to replacements. Wang Yanhui, Secretary-General of the China Mobile Phone Alliance, confirmed this, stating that the total mobile phone sales for the year had declined compared to the previous year, making overseas expansion essential for continued growth.
Rajeev Nair, a senior analyst at Strategy Analytics, emphasized that the Southeast Asian market has been a key driver of growth in the Asia-Pacific region. Many Chinese manufacturers have successfully expanded into Southeast Asia, achieving rapid growth in several key markets. According to Nair, OPPO, Xiaomi, Vivo, and Huawei all experienced strong sales growth in the region.
For example, in Indonesia—the largest smartphone market in Southeast Asia—OPPO and Xiaomi ranked second and fourth, respectively, with OPPO’s sales jumping 163% year-on-year and Xiaomi’s surging 233%. Similar trends were observed in the Philippines, Thailand, Malaysia, and Vietnam, where several Chinese brands made it into the top five.
However, the rise of Chinese brands has come at the expense of local manufacturers. In Indonesia, for instance, local brands' market share fell from 34% in Q1 2015 to 17% in Q1 2017, while Chinese brands grew from 12% to 31%. Nair noted that while some local brands like Cherry in the Philippines and True in Thailand remain competitive, most others are struggling to keep up.
Looking ahead, Wang Yanhui predicted that the next two years would see a battle between Chinese brands and Samsung in the Southeast Asian market, similar to what is happening in India. Nair echoed this view, saying that Samsung and major Chinese brands like Xiaomi, Huawei, OPPO, and Vivo will continue to gain market share, putting pressure on local and other international manufacturers.
Despite the opportunities, entering the Southeast Asian market is not without challenges. The region's vast geography, varying consumer preferences, and price sensitivity pose significant hurdles. For example, in Indonesia, a country composed of thousands of islands, maintaining stable logistics across remote areas is a major challenge. Additionally, many manufacturers are reluctant to localize production due to the relatively small size of local markets.
To succeed, companies like OPPO have focused on localized strategies, including product customization, marketing efforts, and talent development. OPPO has invested heavily in understanding local needs, introducing features such as self-timer cameras, triple SIM support, and beauty software. It also emphasizes local hiring, with over 99% of its overseas employees being familiar with the local market.
Since entering the overseas market in 2008, OPPO has steadily expanded its presence, launching operations in Thailand in 2009, Indonesia and Vietnam in 2013, and accelerating its international strategy in 2014. By 2016, OPPO shipped 13.3 million units in Southeast Asia, ranking second only to Samsung. In Q3 2017, it maintained its position as the second-largest seller in the region with 5.5 million units shipped.
Wang Yanhui noted that OPPO's overseas strategy mirrors its domestic approach, focusing on a mix of promotion and retail partnerships. While Xiaomi leverages price advantages, OPPO and Vivo target higher-end segments. This tailored approach has allowed Chinese brands to thrive in diverse markets, proving that the future of the smartphone industry lies beyond China’s borders.