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Sunday, January 29, 2017
Oppo Leads The Chinese Smartphone Market


Huawei, Oppo & vivo (HOV) emerged as clear leaders in smartphone sales in China for 2016, with Oppo, Vivo registering significant growth.



According to the latest research from Counterpoint's Market Monitor service, the demand for smartphones in China remained healthy during Q4 2016 (Oct-Dec) as the smartphone shipments were up 12% annually and 9% sequentially driving the full year growth and record volumes.

The final quarter of the year was marked with series of flagship upgrades from key brands such as Apple, Oppo, Huawei, Xiaomi which catalyzed the smartphone demand in China. Chinese e-commerce players such as Alibaba also also helped drive the momentum with 11.11 sale during the quarter which broke all the records compared to last year.

Only five brands registered healthy growth during the full year 2016. Oppo, Huawei, vivo, Meizu and Gionee drove the majority of the volume, capturing a combined 58% of the total Chinese smartphone market in 2016. Demand for rest of the brands declined, especially last year's star performers Xiaomi and Apple with lower-than-expectd demand for their smartphones during the year.

Commenting on the vendor performance, Associate Director Tarun Pathak, noted, "Huawei was the leading vendor for the full year with strong demand not only for its affordable Honor branded smartphones but also healthy demand for flagship P and Mate series. Huawei has gained a foothold in the premium market with the successful release of P9 and Mate 8 and will continue to put more emphasis in the premium market going forward challenging Apple. In 2017, we expect Huawei to bear the fruit of its offline channel expansion strategy started in late 2015 to cover 1,000 provinces by the end of the year.

Oppo & vivo were the fastest growing brand and since June 2016 we have seen phenomenal growth for both the brands owing to strong omnipresent distribution channels from tier-1 to tier-4 cities across China, aggressive ATL and BTL marketing, effective retail-level promotions for both trade and consumers and effective positioning with focus on key features such as camera, battery life and audio within their smartphones. Though, Oppo has been leading the quarterly rankings ahead of rival Huawei in the second half of 2016.

2017 will be an exciting year and will be a close race between these top three brands which together controls almost half of the Chinese smartphone market as they try to out-innovate and out-market each other."

Adding further on the brands which failed to grow, Research Analyst MengMeng Zhang, highlighted, "Xiaomi, the most talked about vendor last year, slipped to fourth spot during the year as the demand for its smartphones declined 22% annually. The key reason for this decline was its rivals racing ahead with key features, innovation, bigger marketing budgets and wider online and offline distribution channel during the year.

Thus, most of the demand for Xiaomi remained across its cheaper sub US$150 Redmi series models than any of the halo flagship devices. Furthermore, Xiaomi's online sales model has been hitting a ceiling. Thus, Xiaomi is looking to expand its offline presence by opening more than 200 Mi Home Stores in 2017 on top of the 54 Mi Home Stores currently. However, we believe that this pace will not be of much help in boosting Xiaomi's offline presence in 2017.

Whereas, Apple with slowing traction for its flagship iPhone 6S during the year saw its double digit negative growth being somewhat offset by relatively healthy demand for the newer flagship iPhone 7 series in Q4 2016. However, Apple still remains in a vulnerable position and there is higher expectation already with the next year flagship which is rumored to be substantial upgrade from both design and components perspective."

Best-Selling Smartphone Models Share in 2016 and market share (%)

  1. OPPO R9 4%
  2. Apple iPhone 6S 2%
  3. Huawei HONOR Joy 5S 2%
  4. OPPO A33 2%
  5. MI Redmi Note 3 2%
  6. LeEco Le2 2%
  7. vivo Y51 2%
  8. Apple iPhone 6S Plus 1%
  9. vivo X7 1%
  10. Huawei Mate8 1%
  11. OPPO R9 Plus 1%
  12. Huawei P9 1%
  13. MI Redmi 3S 1%
  14. MI Redmi 3 1%
  15. OPPO A59 1%
  16. Apple iPhone 7 1%
  17. MI 5 1%
  18. OPPO A37 1%
  19. Meizu Blue Note 3 1%
  20. Apple iPhone 7 Plus 1%

Source: Counterpoint Research Model Sales Tracker

Oppo had five models in the top 20 rankings, followed by Apple and Xiaomi with four each and Huawei with three and vivo with two. In terms of premium segment, Apple with iPhone 7 and 6s and Huawei with Mate 8 and P9 dominate. In high-end, its Oppo and vivo dominating whereas the mid-tier is dominated by Xiaomi and Oppo. LeEco Le 2 and Meizu Note 3 were the key models which drove volumes for these brands respectively in 2016.



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