Chinese smartphone brands see value market share shrink as Apple, Samsung woo buyers

Chinese smartphone companies

Despite a slight uptick in market share in terms of volumes, Chinese smartphone brands have suffered a substantial decline in value market share during the January-March quarter of 2024, compared to the pre-Covid levels as consumers rush for iPhones and premium Samsung smartphones, analysts said.

The cumulative value market share of Chinese smartphone brands - Xiaomi, Vivo, Oppo, Realme, Transsion and Motorola - declined to 54 percent in the March quarter compared to 65 percent in the Q1 of 2020, showed the latest Counterpoint Research report.

Their volume market share, hovering above 73 percent since 2020, reached 75 percent in the January-March quarter of 2024. Their share, however, hit a low of 61 percent in the July-September period due to low demand and inventory bottlenecks, according to Counterpoint data.

"Talking about the Chinese smartphone companies, their market share registered a slight growth from the pre-Covid era to Q1 of 2024. However, when it comes to value, there has been a noticeable decline in the value share of Chinese brands," Tarun Pathak, research director at Counterpoint, told Moneycontrol.

"There are three reasons for the same. First, Chinese brands were slow to adopt the financing trend, second, in the premium segment, they lacked brand pull beyond Rs 40,000, coupled with lack of new launches in new segments like foldables,” Tarun Pathak, research director at Counterpoint told Moneycontrol. Third, according to him, some of the Chinese brands started focusing on the mass market segment which led to a decline in value market share. “For instance, Oneplus' premium market share declined due to its pivot to the Nord series, which is a mass-market product.”

In the Indian smartphone market, value is driven primarily by global brands like Apple and Samsung. "Both Apple and Samsung trending at their record average selling points (ASPs) in India."

As per research firm Cybermedia Research (CMR), the cumulative revenue share of Chinese handset brands has declined to 48 percent in Q1 of CY24 from 70 percent in Q1 of CY20.

Faisal Kawoosa, founder analyst at TechArc, said that Apple and Samsung have grown in the above Rs 50,000 segment. “This eats up value share of Chinese brands. The blended average selling price for Apple and Samsung would be Rs 40-45,000, as against Chinese brands whose share would be Rs 18-20,000.”

A brand becomes crucial for individuals investing over Rs 50,000 in a smartphone.

Kawoosa said Apple represents aspiration, while Samsung combines brand equity with strong resale value in the Android market. “Others are yet to make a mark. Consumers after so many years are comfortable with OnePlus in the Rs 35,0000-45,000 range and Vivo up to Rs 35,000 and then there is none.”

Except for Oppo, nearly every Chinese smartphone brand saw shipments grow in the March quarter, according to Counterpoint.

During Q1, Xiaomi experienced a 28 percent on-year increase, Lenovo-owned Motorola surged 58 percent, Transsion brands grew 20 percent, and Realme saw an 18 percent on-year growth.

In volume terms, China’s Vivo emerged as India’s top smartphone brand in the January-March quarter of 2024, beating Samsung, which slipped to the third place, even as the premiumisation trend picked up pace.

Vivo cornered a 19 percent share of the market, driven by its 5G leadership, while China's Xiaomi and Korea's Samsung came in second and third at 18.8 percent and 17.5 percent share, market research firm Counterpoint Research said in a report on May 9.

“The premiumisation trend is there and Indian brands lack the pull to play in that segment hence Chinese players remain in a dominant position. Additionally, some of the Chinese players have expanded their presence offline and their share in India,” Pathak said.