While the average smartphone market in the world has shrunk by more than 25 percent between the third and second quarters of 2017, the Chinese mobile market exploded. With more than 200 million new mobile phone users in China, the Chinese mobile phone market has tripled in the past year, according to iResearch, an industry research company.
The Chinese domestic market accounted for approximately 61.4 percent of global mobile phone shipments in the second quarter of 2017, according to Canalys, a market research company. Chinese customers are buying Chinese smartphones at such high rates that China now outpaces the U.S. in mobile phone shipments, according to iResearch.
“As an industry, we can’t get complacent in the face of so much growth,” said Chris Jones, research director at iResearch. “But as a U.S. company, we don’t want to lose the American market.”
While the growth in the Chinese market has been great for Apple, Samsung and Chinese domestic phone makers, not all phone makers are benefiting equally. Although Huawei and Xiaomi have been the most active in expanding their brand portfolios, they haven’t had the brand recognition, high volume or marketing budgets that some of their Western rivals have.
“If you take a look at Xiaomi’s website, you’ll see that the Chinese market is the only market they support,” said Ralf Grosse, CEO of Telefonica’s mobile business in Europe, the Middle East and Africa. “The consumer perception about Xiaomi’s quality is that it is not top-quality but it’s actually very good in some areas. In China, the quality is high. You can expect the same quality in Western markets, but the volume might be a different story.”
Jones said the Chinese mobile market has changed in the past year.
“From the last fiscal year to the current fiscal year, the Chinese are more tech-savvy,” Jones said. “The Chinese consumers want more for their money. They are buying smartphones with better specs and that is something that is difficult to replicate in the U.S. and some other markets.”
Jones said the Chinese mobile market in the U.S. has been strong but in a lower volume of phone sales.
“In the U.S., there have been some really great phones over the last year,” he said. “There are high-quality cameras that have been adopted by consumers.”
The rise of Chinese mobile phones has been so strong that even Apple, which has never been a major player in the Chinese market, started to sell phones under the Jia-Yu brand, which is the Chinese version of the iPhone.
Grosse said the Chinese market has brought in new mobile phone manufacturers that are making the leap from “copycat” products to quality devices.
“There is a new batch of smartphone companies coming from China that have done a great job,” Grosse said. “If you look at a phone like the Xiaomi Redmi, it’s not only a great product, but it’s also a great brand.”
Although Apple and Samsung are still the top two smartphone vendors in the world, Chinese manufacturers are making up a greater portion of global shipments than ever before. According to Canalys, the top two smartphone vendors in the world are Samsung and Huawei, both of which sell only in China. The two companies sell approximately 30 percent of all mobile phone shipments in the world.
Jones said the Chinese mobile market is a big market and should be part of every marketer’s advertising strategy.
“If you look at the whole world, the Chinese market is the largest market for smartphones and the next one to double is India,” Jones said. “If you don’t have the Chinese market, you can’t have any other market.”
Jones said smartphone manufacturers can also capitalize on the popularity of Chinese mobile phones.
“To me, this is a sign of the growth of the industry,” Jones said. “China is a huge market and it is growing fast. Consumers are willing to pay more and buy products that are very trendy.”
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