Chinese smartphones to take the lead on the global market

Chinese smartphone brands have been growing rapidly driven by the strong domestic market and their heavy investments in R&D, according to the latest research by TrendForce. Since last year, the brands’ combined share has reached above 50% in the global smartphone market, where Korean and American brands used to dominate. The intensified competition would eliminate brands faster and make the market more concentrated. This year, the Chinese smartphone brands, independent design house (IDH) included, are expected to achieve a combined share of 54% as a result of successful expansion in overseas markets. The global smartphone market will be flat this year or have only marginal growth due to the weak momentum, even with increasing demand from emerging markets. The consumers are less willing to replace smartphones, and the replacement cycle is also longer. As the result, the competition will be more intense among brands that aim to maintain their market share. TrendForce points out that, the keys for Chinese smartphone brands’ growth include active exploration of new markets, simplifying sales channels, and deployments in both online and offline sales. In addition to diversified business models, the brands’ expansion in the global market has been mainly due to their successful pricing strategies. With a focus on the high performance-price ratio, as well as a wide range of products and prices, Chinese smartphone brands managed to succeed in new markets. However, the overemphasis on high performance-price ratio has been squeezing the profits for these brands. Consequently, some brands would be forced to exit from the market faster due to the pressure from cash flow, and the Chinese smartphone market would be more concentrated. Currently, Huawei, Xiaomi, OPPO, and Vivo have outperformed other smaller brands, accounting for nearly 70% of all the shipments of all Chinese brands. The four major brands would continue to lead the expansion, boosting the market share of Chinese smartphone brands in the global market.

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