China market: Smartphone brands show polarized sales pe…

China and Taiwan smartphone vendors are showing polarized sales performances in China market, with smaller vendors such as LeEco and Asustek Computer gradually losing ground and leading ones such as Huawei, Xiaomi, Vivo and Oppo steadily trending upward, according to market sources.

The sources said that after failing to honor installment payments to its supply chain partners, China’s LeEco has suffered from a spate of negative news including alleged sales suspension of specific smartphone models at LeMall and many contracted suppliers rushing to seek return of debts, significantly undermining its smartphone sales in China.

Sales of Asus-branded smartphones in China also failed to fare as well as as expected in the first half of the year amid keen competition from Chinese counterparts, with the Taiwan-based vendor turning conservative in placing orders with supply chain partners. This, in turn, has significantly impacted its manufacturing partners including Arima Communications.

In earlier years when Asustek was aggressively developing overseas markets, Arima set up a manufacturing plant in Indonesia to handle contract production of Asus Zenfone series. But now the shrinkage in production orders from Asus has forced Arima to seek orders from other vendors such as China’s ZTE and South Korea’s LG Electronics, so as to maintain a viable capacity utilization rate.

Huawei, Xiao, Vivo, Oppo in leading group

In contrast, leading brands such s Huawei, Xiaomi, Vivo and Oppo are aggressively moving to expand their sales to consolidate their position in the leading group. Among them, Vivo and Oppo were the two major winners in the China smartphone market in 2016, and this year they have continued to spend heavily on promoting sales via intensive physical sales outlets, and through placement marketing on TV channels as well as celebrity endorsements, repeatedly creating new sales records.

Oppo, for instance, has enjoyed shinning sales of its latest star model R11 since it officially hit the China market on July 1, as a result of the firm’s even higher marketing budget than last year’s and intensive promotion campaigns. Oppo has kept increasing orders with its contract producers to meet market demands, a move that has squeezed the production schedules for other brands. The company expects sales of R11 alone to break the level of 20 million units.

To counter, Huawei is also actively strengthening its retail deployments by establishing more physical stores in cities around China.

Likewise, Xiaomi is also gearing up to build retail channels, planning to set up 2,000 stores within three years in China and overseas markets. Xiaomi CEO Lei Jun pointed that that the brand sold 23.16 million units in the second quarter of 2017, a new quarterly high and representing a whopping growth of 70% on quarter. This indicates Xiaomi is back on the growth track after a 2-year hiatus, inspiring the company to set a challenging sales goal of 100 million units for 2018, according to Lei.

Oppo’s R11 has been selling well since it hit the China market on July 1.
Photo: Michael Lee, Digitimes, July 2017

Categories: ICT manufacturing IT + CE Mobile + telecom Mobile devices

Tags: Arima Communications China China market Huawei LeEco sales smartphone Xiaomi ZenFone ZTE

Topics: Huawei Asustek phones

Companies: Arima Communications

Related stories
• China smartphone vendors ramping a-Si LCD panel orders (Jul 12)
• Taiwan IC design houses seeing orders ramp-up from China smartphone sector (Jul 7)
• China smartphone vendors shifting panel orders away from Taiwan (Jul 5)
• Huawei, Oppo and Vivo likely to ship fewer-than-expected smartphones in 2017 (Jun 23)
• Taiwan market: Oppo launches R11 in local market (Jun 22)
• China market: Oppo unveils next-generation R11, R11 Plus smartphones (Jun 13)
• Huawei competes head to head with Oppo in domestic and overseas markets (May 23)
• Robust chip demand from China smartphone firms to boost revenues at IC distributors (May 22)
• Taiwan market: More China vendors to follow Oppo to expand share in local smartphone market (Apr 27)

Related news from other sites

• Qualcomm to ride Oppo, Vivo smartphone gains in China, says Rosenblatt (Jan 12) – Barron’s
• Dolby drags Oppo and Vivo to court; demands royalties for unlicensed use of proprietary technology (Nov 11) – Firstpost
• Xiaomi to invest US$1 billion to expand internet TV content (Nov 4) – Reuters
• Domestic phonemakers drive China smartphone growth (August 2)  – ZDNet