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In November 2017, Gartner released its global smartphone market data for the third quarter, revealing that Chinese brands such as Huawei, OPPO, and Xiaomi had entered the top five global smartphone manufacturers alongside industry giants Samsung and Apple. This marked a significant milestone in the rise of Chinese tech companies on the world stage. Notably, Xiaomi's shipments surged by nearly 80% year-on-year, with its market share increasing from 4% to 7%. These figures were impressive and signaled a growing influence of Chinese brands in the global market.
In Southeast Asia, Chinese manufacturers continued to make waves, delivering strong performance in local markets. According to IDC, OPPO ranked second in terms of sales volume in 2016 with a 13.2% market share, and its shipments grew by an impressive 137.5% year-on-year. Meanwhile, Asustek and Huawei occupied the third and fourth spots with 5.9% and 5.1% respectively. More recent data from Strategy Analytics showed that in Q3 2017, OPPO once again claimed second place in Southeast Asia with a 17.2% market share, followed closely by Vivo with 4.6%.
As the domestic smartphone market in China approached saturation, expansion into overseas markets became a strategic necessity. Gartner’s report highlighted that while the Chinese market experienced a decline, growth in emerging Asian-Pacific and North American markets helped maintain global shipment growth. In Q3 2017, smartphone sales in Greater China dropped from 32.3% to 27.9%, while emerging Asia-Pacific markets saw their share increase from 19.1% to 21.3%.
This shift was not unexpected. By 2015, IDC reported a 4.3% year-on-year decline in smartphone shipments in China, with market penetration reaching 90%, signaling a transition from new device purchases to replacements. Tom Kang of Counterpoint Research noted that the market was becoming saturated, pushing manufacturers to seek growth elsewhere.
Wang Yanhui, Secretary-General of the China Mobile Phone Alliance, confirmed this trend, stating that domestic sales had declined further in recent years. He emphasized that the success of brands like Xiaomi was largely driven by international expansion, which he called an inevitable trend for Chinese manufacturers.
Rajeev Nair of Strategy Analytics echoed this sentiment, highlighting the significant contribution of the Southeast Asian market to global smartphone growth. He pointed out that Chinese brands such as OPPO, Xiaomi, Vivo, and Huawei were seeing strong growth in the region, particularly in countries like Indonesia, the Philippines, Thailand, Malaysia, and Vietnam.
In Indonesia, the largest smartphone market in Southeast Asia, OPPO and Xiaomi held the second and fourth positions in Q3 2017, with sales increasing by 163% and 233% year-on-year respectively. Similarly, in other Southeast Asian countries, Chinese brands were making their mark, challenging traditional local players.
Local brands in Southeast Asia, such as those in Indonesia, the Philippines, and Thailand, have faced increasing pressure from foreign competitors. For example, in Indonesia, the share of Chinese brands rose from 12% in Q1 2015 to 31% in Q1 2017, while local brands saw their market share drop from 34% to 17%.
Wang Yanhui predicted that the next two years would see a fierce competition between Chinese brands and Samsung in Southeast Asia, similar to what has already happened in India. Nair agreed, noting that Samsung and Chinese brands were expected to continue expanding their market shares, impacting local and international manufacturers alike.
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 instance, Indonesia's archipelago nature makes logistics and distribution complex. Additionally, many manufacturers are hesitant to establish local production due to the relatively small size of individual markets.
However, Chinese brands like OPPO have adapted by focusing on localized strategies. They conduct extensive consumer research and tailor products to meet regional needs, such as introducing features like self-timer experts, three-card independence, and beauty software. OPPO also emphasizes local talent, ensuring that over 99% of its overseas employees understand the local market.
Since entering the global market in 2008, OPPO has steadily expanded its presence, starting with Thailand in 2009 and later entering Indonesia and Vietnam in 2013. By 2014, it began large-scale international expansion. In 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 brand in the region.
Wang Yanhui noted that OPPO’s overseas strategy mirrors its domestic approach, combining promotional efforts with a strong retail network. While each brand adopts a different model—such as Xiaomi’s focus on affordability—OPPO and Vivo emphasize premium offerings. This diversified approach has helped them thrive in diverse markets across Southeast Asia.