China’s top three smartphone makers – Huawei, Oppo and Vivo – increased their share of the country’s smartphone market in Q2, with all three far outpacing the overall growth rate of 4.6 per cent.

The three accounted for 47 per cent of the market during the quarter, up from 45 per cent in Q1 and 43 per cent last year, according to IDC.

Market leader Huawei continued to expand, pushing its share to 17.2 per cent from 15.6 per cent a year ago, with shipments growing 15.2 per cent to 19.1 million units (see chart below, click to enlarge).
IDC China smartphone Q2
Oppo saw the fastest growth as its shipments surged 124 per cent to 18 million units and it more than doubled its share to 16.2 per cent from a year ago, edging within 1 percentage point of Huawei.

Number three Vivo expanded its share from 7.9 per cent to 13.2 per cent over the past year, with shipments increasing 75 per cent to 14.7 million units.

Once fast-rising Xiaomi continued to lose market share, which fell to 9.5 per cent from 16.1 per cent a year ago, as shipments contracted 38 per cent to 10.5 million units.

Apple also lost share – dropping to 7.8 per cent from 11.9 per cent in Q2 last year – as shipments dipped 32 per cent. IDC noted that the iPhone SE was not a hit in China, where consumers prefer larger screen-sizes. During the quarter nearly 90 per cent of phones shipped had screen sizes of 5 inches and above.

Apple fans are likely holding out for the new iPhones to be launched in Q3.

The research firm said total shipments reached 111.2 million during the quarter, up from 106.3 million a year ago, as the market returned to growth after a year.

Marketing focus
“The success of Huawei, Oppo and Vivo in the market can be attributed to their concerted effort to build their brand and aggressive marketing to attract the consumers, along with the focus on product differentiation,” said Xiaohan Tay, senior market analyst at IDC Asia/Pacific.

Tay said Oppo and Vivo continued to excel largely due to the strength of their offline channels, with their shops and advertisements occupying most of the tier three to tier five cities.

Despite the market being saturated and driven mainly by replacement users, vendors have been aggressive with their marketing tactics, experimenting with new ways to win over consumers.

“Hiring celebrity endorsers may help increase numbers in the short-term, but this alone may not be sufficient to drive numbers in the long run. As there is very little differentiation across products to warrant significant brand loyalty, vendors must constantly think out of the box to get people hyped up about their products,” said Tay.