The
Chinese mobile market continues to evolve at a remarkable pace. China internet use is quickly catching up with the USA, with Chinese consumers owning an average of 4.1 internet connected devices each, compared to 4.9 in America. And in some ways, Asia has usurped the states:
92% of China internet users own a smart phone, compared to 72% in the USA.
The final quarter of 2015 saw the Chinese smartphone market grow by 8%, the equivalent of over 117 million devices. So what does the market growth tell us about mobile market in China?
A rapidly evolving market
It’s not just that the
mobile market in China is growing; also of interest is how it is changing to respond to consumer demand. Just two years ago the top market players were Samsung, Coolpad and Lenovo.
Now, Xiaomi, Huawei and Apple take the top spots. Xiaomi and Huawei have been able to gain popularity thanks to their understanding of the market. Where large multinational companies such as Apple are selling expensive premium handsets, these domestic manufacturers have been able to undercut their prices with low-cost devices, allowing them to gain a share in developing markets.
The change in the top three shows just how effective it can be to identify the core needs of your consumer and address them with your product offering. Xiaomi have also benefited from their famous mobile marketing strategy, which involves using
Chinese social media to turn their fans into avid brand ambassadors, allowing them to promote themselves without the need of paid-for advertising.
Domestic manufacturers are recognising the value of rural markets
When many overseas businesses think about China, they automatically think of the large Tier 1 cities, such as Shanghai, Beijing and Guangzhou. However, those markets are becoming saturated. While the large established brands continue to throw large amounts of money and resources into battling over the major cities, other domestic manufacturers have been able to evolve into major players in telecommunications thanks to the way they target their business.
It would be a mistake to think that lower tiered cities in China are not a valuable or worthwhile market. Tier 4 and 5 cities, the two lowest ranks in the classification system, are home to a combined 250 million households, a market nearly 16 times the size of Tier 1. These two tiers also have a combined income value of 7 trillion.
Brands such as OPPO and Vivo have identified the fact that consumers in these parts of the country cannot afford, and do not desire, expensive smartphones. However, these consumers are responsible for 56% of Chinese consumption, and by creating low-cost devices to suit their needs, OPPO was able to rise to claim the fifth spot on China’s list of the biggest smartphone manufacturers, while Vivo took fourth place.
Their success demonstrates the vast and complex nature of the
China internet market, and the need to understand that
the most lucrative opportunities may not necessarily be in China’s wealthiest regions.
Mobile marketing is becoming increasingly important for China’s market and has huge potential in the future!
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