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Vietnam’s Q3 2022 Smartphone Shipments Up 34% YoY on Increased Economic Activity

Samsung led the market followed by OPPO and Xiaomi.
Apple shipments surged 139% YoY.
$200-$400 price band shipments grew 159% YoY.
Online channel shipments increased 67% YoY.

New Delhi, Jakarta, London, Boston, Toronto, Beijing, Taipei, Seoul – December 1, 2022

Vietnam’s smartphone shipments increased 34% YoY in Q3 2022, according to Counterpoint’s latestMonthly Vietnam Smartphone Channel Share Tracker. The results highlight the strong economic growth in the country during the quarter, driven by the increasing manufacturing activity and improving consumer sentiment, despite moderate inflationary pressures. The launch of new smartphone models along with increasing demand for budget and high-end models were also among the key factors responsible for the quarterly growth.

Apple’s shipments surged 139% YoY in Q3 2022 as more consumers in Vietnam bought premium smartphones. The iPhone 11, iPhone 13 and iPhone 13 Pro Max were among the most preferred models during the quarter. Apple distributors are opening more official stores in Vietnam, which is helping the brand reach more customers.

Shipments of majorChineseplayers likeXiaomi,realmeandOPPOalso grew during the quarter. Xiaomi was boosted by the POCO C40 series as Vietnam was the first country where the model was released. realme was driven by its C-series smartphones, while OPPO was helped by the A57 and the newly launched Reno8 series.

Source: Counterpoint Monthly Vietnam Channel Share Tracker, Q3 2022

Q3 2022 shipments in the <$200 retail price band remained flat YoY due to weaker shipments from Samsung. The segment was mostly driven by Xiaomi and realme. The $200-$400 band saw the biggest growth during the quarter as demand for mid-budget smartphones increased in the country. Brands have been launching most of their newer models in this range. In Q3, some of the popular models in the price segment were OPPO’s Reno8 4G and A96, Redmi’s Note 11 and vivo’s Y22s. Meanwhile, the strong growth in the $400-$600 price band was driven by Apple. Vietnam is one of the fastest growing markets for iPhones.

Commenting on the price range,Research Analyst Akash Jatwala说,“出货量在> 600美元同比增长了17%in Q3 2022 driven by Apple and Samsung. Vietnam has increasingly started to prefer premium smartphones and among them the iPhone 13 series and the Samsung Galaxy S22 are the most popular.”

5G smartphoneshipments jumped 129% YoY in Q3 2022 and accounted for 34% of the overall shipments during the quarter as brands launched more of such models. 5G is not present in Vietnam yet but the technology might be commercially launched here in 2023, which could further boost economic activity in the country. However, there is no news regarding a spectrum auction and telcos are only just conducting trials with vendors in major provinces.

Online channels grew 67% YoY in Q3 2022 and contributed to 18% of Vietnam’s total shipments as customers were attracted by discounts, cashbacks and easier financing. Pre-orders along with replacement options and bundling of devices with TWS at a discounted price were some of the other appealing promotions from online channels.

On the issue of smartphone manufacturing, OEMs are increasing investments in the country and looking into newer areas to diversify. Apple is set to start manufacturing iPads, Apple Watches and MacBooks in Vietnam, and Google is also planning the same for its Pixel smartphones. Manufacturing activities have helped Vietnam in creating jobs and increasing economic growth, which in turn has increased consumers’ buying power. As OEMs are increasingly preferring Vietnam as a manufacturing hub, more companies are likely to expand their presence in the country, which in turn will foster economic growth.

Outlook

For Q4 2022, we are optimistic about the Vietnamese smartphone market. We expect shipments to grow in the final quarter. This is based on Vietnam’s reported growth in GDP during Q3 2022, an increase in manufacturing activity and a moderate rise in inflation.

In Q4 2022, smartphone shipments in Vietnam are likely to receive a boost from the iPhone 14 series and new model launches from various brands across different price ranges. Increasing consumer spending in the lead up to the Lunar New Year will also help in driving shipments.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Akash Jatwala

Follow Counterpoint Research
press@www.arena-ruc.com

Indonesia’s Q3 2022 Smartphone Shipments Down 21% YoY on Macro Concerns; Good Q4 Seen

The <$250 price band took the hardest hit.
OPPO led the market followed closely by Samsung and vivo.
The $500-$699 price band grew 134%.
Online channel shipments increased 8% YoY in Q3 2022.
5G smartphone shipments increased 42% YoY.

Jakarta, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – November 14, 2022

With macroeconomic conditions showing no signs of improvement, Indonesia’s smartphone shipments declined 21% YoY in Q3 2022, according to Counterpoint’sMonthly Indonesia Smartphone Channel Share Tracker.High smartphone demand in Q3 2021 after the lifting of COVID-19 lockdowns resulted in higher shipments which made this quarter look even worse.

OPPOmanaged to regain the top spot in Q3 2022 driven by its A16 model family, A57 series and Reno series. Aggressive marketing and models spread across price bands also contributed to the good show.

Major OEMs cut their shipments as inventory piled up. In the $150-$249 band, Samsung’s dominance weakened, thereby placing vivo and OPPO as the main OEMs with a combined share of 51%. The <$150 price band was led by OPPO andvivowith a 34% share.Infinixhas increased its presence in this segment by introducing the Hot 12 series.

Source: Counterpoint Monthly Indonesia Channel Share Tracker, Q3 2022

Smartphones priced ≥$500 are unlikely to be affected by macroeconomic headwinds due to the consumer group’s capacity for discretionary expenditure. Therefore, OEMs have increased the options for this price band. OPPO with its Reno series once held the crown in the $500-$699 segment. In Q3 2022,Samsungand OPPO led the segment with a share of 63%.

Commenting on the price range dynamics,Senior Analyst Febriman Abdillahsaid, “The $500-$699 price segment can be an attractive market given its high growth in economically turbulent times. In Indonesia, OEMs are offering specifications like 8-12GB RAM, 256 ROM, 4000-6000mAh battery capacity and 5G capability. These in-demand specs can help in better targeting of consumers.” The OPPO Reno 8’s Portrait Expert mode claims enhancements in photography technology.realme’sGT Neo series has come up with a “speed” differentiator that improves smartphone gaming. Samsung’s Galaxy A73 5G was one of the top mid-range phones.

Smartphone online channels grew 8% YoY in Q3 2022 to reach 22% of overall shipments. Product availability is one of the key drivers that motivate consumers to visit online platforms. Aside from price promotions, cashbacks, free shipping and bonus points from e-finance providers, the opportunity to get the latest products throughpre-orderschemes is another attraction of the online channel. Among e-commerce players,Shopeemaintained its top spot followed byAkulaku,Lazada,TokopediaandBlibli.

In addition to marketplaces, OEMs have improved their own online channels, such asXiaomi, OPPO, realme and Samsung’s online stores. Virtual shopping stores like Samsung Experience Store could be a leap in the application of technology in connecting products with consumers. Here, 5G-ready phones can provide a better virtual experience.

5G smartphoneshare reached 25% in Q3 2022, which is a bit slower than Indonesia’s Southeast Asian neighbors. 5G smartphone shipments grew 42% YoY. This growth mostly came from the $250-$349 price band as most smartphones in the higher price band were already 5G-ready. In the $250-$349 band, Samsung and vivo led the 5G growth with the Galaxy A33 series, M33 series and vivo Y75.

Outlook

Entering Q4 2022, we expect progress in macroeconomic recovery, which may stir the smartphone market.Abdillahsaid, “There is optimism for a possible increase in demand for budget and mid-range smartphones during the shopping season. We may see further enhancements in specifications here for the new models. This may trigger demand by way of smartphone upgrades, especially when there is also a possibility of pent-up demand in Q4. The challenge will be how to attract consumers effectively. Consumers will have a wide choice of smartphone brands and models and will be more conscious of what features they need.”

Although the smartphone market declined in the last two quarters, there has been significant market movement towards online platforms. The smartphone ecosystem is getting better in terms of providing the latest and relevant product technology.

Feel free to contact us atpress@www.arena-ruc.comfor questions regarding our latest research and insights.

Background

Analyst Contacts:

Febriman Abdillah

Glen Cardoza

Philippines Smartphone Shipments Decline 3% YoY in Q2 2022; Apple Fastest Growing Brand

ThePhilippines’ Q2 2022 smartphone shipments declined 3% YoY to 4.7 million units.
Apple, Infinix and TECNO were major YoY gainers in terms of shipments.
Chinese players except Xiaomi and realme saw a decline in their smartphone shipments.
5G smartphone share in shipments increased from 7% in Q2 2021 to 34% in Q2 2022.
Online shipments increased 15% YoY with Lazada leading with a 46% share.

Jakarta, Hong Kong, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – Sept 9, 2022

The Philippines’ Q2 2022 smartphone shipments declined 3% YoY to 4.7 million units, according to Counterpoint’s latestMonthly Philippines Smartphone Channel Share Tracker. The figures show the country’s macroeconomic stability, low inflationary pressure and an increase in consumer spending due to its markets returning to normal.

Commodity-exporting economies inSoutheast Asialike thePhilippinesare expected to outperform the commodity-importing ones because of improved terms of trade. The economic impact of the Ukraine-Russia war is gradually fading out from Southeast Asian countries even as COVID-19 weakens its grip, pushing up tourism. New launches, along with customerpreference for premium models, also played a key role in the Q2 2022 smartphone shipments.

Source: Counterpoint Monthly Philippines Smartphone Channel Share Tracker, Q2 2022

In terms of market share,realmetook the top spot with a 22% share driven by the launch of its reasonably priced smartphones, particularly the C series and 9 series, in Q2 2022.Samsungtook the second spot with a 20% share driven by its newly launched Galaxy A series models and ongoing promotions.OPPOhad a 15% share driven by its Reno A series whilevivohad a 14% share driven by its V series and newly launched X series. Xiaomi took the fifth position with a market share of 10%.

Demand for5G smartphonesincreased considerably during the quarter as their shipments increased to 34% share from 7% in the same period last year. To stay competitive, majortelecom providersGlobe Telecom, Dito and Smart have been actively extending 5G coverage. With the introduction of DITO Tele-community,telecommunication infrastructureinvestments have more than tripled. The primary factors driving growth in the telecom industry are increasing coverage, lower costs, better service, rising data demand, and smartphone adoption.

Source: Counterpoint Monthly Philippines Smartphone Channel Share Tracker, Q2 2022

Apple, at 50% YoY, saw the biggest growth during the quarter with Filipinos preferring premium smartphones. Reduction in the iPhone 13 series prices contributed to the growth.

ChineseplayersXiaomiand realme ran several promotional campaigns online, particularly on Shopee and Lazada, which helped with their shipments. On the other hand, shipments of other Chinese brands decreased in Q2 2022 as the brands faced inventory issues. Thee-commerce industryis expanding quickly in the region. Around 18% of all shipments in Q2 2022 were made through the online channel, an increase of around 15% YoY. Apart from online channels, social commerce is gaining popularity, especially through TikTok. realme became the first brand to launch its official store in TikTok live shopping.

Commenting on mobile gaming,Senior Analyst Glen Cardozasaid, “The Philippines is akey gaming marketin Southeast Asia and is seeing rapid growth. Manufacturers are keeping up with the demand. High-endgaming smartphoneslike the Black Shark 4 Pro, Asus ROG Phone 5s and 5s Pro, and ZTE’s Nubia RedMagic 7 are doing well in the market. Major companies are following suit and joining forces withgaming leaguesto serve as official sponsors. In May 2022, there was a gaming competition.”

Smartphone brands are also organizing e-sport tournaments, like vivo’s PUBG, OPPO’s Game on Cup, or Samsung’s MLBB All-star Showdown in partnership with Moonton.

In the coming months, the economic impact of the Ukraine-Russia war will gradually fade. Also, COVID-19 restrictions in Southeast Asian countries are likely to be relaxed, bringing back tourists and, in turn, increasing cash flow in the market and purchasing power. On the other hand, China, with itszero-Covid policytriggering partial or full lockdowns in various cities, and globalinflationmay impact smartphone shipments. The Philippines posted a GDP growth of 7.4% in Q2 2022 with recovering consumer sentiment. We expect the market to expand further. As a result, the smartphone shipments in Q3 2022 may increase a bit but the TAM will be on the flatter side.

Feel free to contact us atpress@www.arena-ruc.comfor questions regarding our latest research and insights.

Background

Analyst Contacts

Glen Cardoza

Follow Counterpoint Research
press(at)www.arena-ruc.com

Indonesia’s Q2 2022 Smartphone Shipments Decline 11% YoY as Macro and Currency Issues Hobble Low-End Segments

Indonesia’s Q2 2022 smartphone shipments declined 11% YoY to fall below 9.4m units
The broad preference for budget, sub-$150 devices made Indonesia especially vulnerable to macro weakness and currency fluctuations
Of the top OEMs, only Samsung managed to grow shipments YoY
Most major Chinese brands saw double-digit declines
Online channels ticked up, highlighting its continued importance
We are ‘not bullish’ on 2H, but device upgrade cycles a bright spot with 5G devices more than 20% shipment share during Q2

Jakarta, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – August 16, 2022

Indonesia’s Q2 2022 smartphone shipments fell 11% year-on-year to 9.4m units, according to Counterpoint’s latest Monthly Indonesia Smartphone Channel Share Tracker.

The disappointing results reflected broader regional andglobal trendswhere macro headwinds and currency issues made for a tough quarter. Base effects were also in play, as severe lockdown restrictions last year boosted demand for smartphones as more people spent more time online, magnifying the impact of this year’s economic woes.

Q2 2022 Indonesia Smartphone Shipment Share by Key OEM

Source: Counterpoint Monthly Indonesia Channel Share Tracker, Q2 2022.

Demand for budget devices (<$150), which account for a big portion of the market, fell the most, with shipments falling after Ramadhan and Eid Al Fitr. The latter half of the quarter was especially bad; June was off by almost 1m units compared to last year in the budget category.

Samsung was the only gainer in terms of unit shipments, which grew by a massive 33% – though much of it was due to base effects as the vendor struggled last year from supply issues stemming from its Vietnam factory shutdown.

Nevertheless,Samsung向市场推出各种处于低度到中度end devices like it’s A and M series, which did especially well in April, accounting for 14% of total domestic shipments during the festive month. It was enough to help the company take pole position in terms of market share for the first time in three years, but not enough to match pre-COVID levels.

Xiaomisaw the biggest slide as chipset supply issues continued to plague shipments after its record Q2 2021. The latest quarter saw shipments fall YoY by an astonishing 47%.

Q2 2021 vs. Q2 2022 Indonesia E-Commerce Rank for Smartphone Shipments

Source: Counterpoint Monthly Indonesia Channel Share Tracker, Q2 2022.

More broadly,online channelsticked up as OEMs and major e-commerce sites offered promotions to help drive sales. Almost one out of every five smartphones shipped last quarter were through online channels. “What’s interesting to see is the fast rise of domestic fintech player Akulaku, which grabbed third spot last quarter in online shipments,” notesSenior Analyst Febriman Abdillah. “One of the ways they grabbed share was by providing buyers with Akulaku instalment plans. This ‘pay later’ pricing strategy will be important in growing the mid-end of the market, especially considering the current macro climate.”

Looking forward to 2H, our expectations for Indonesia remain tempered. Although it is less vulnerable to a recession than some of its regional and global peers, currency fluctuations will likely play a strong role in driving or hampering smartphone demand and ourglobal macro outlookimplies elevated inflation risk. Reduced spending power will hit segments shopping for low-to-mid end devices the hardest – making domestic smartphone demand especially vulnerable over the second half of 2022. However, there is room for some optimism as the upcoming 3G shutdown and continueddigital transformationefforts will lead consumers to upgrade their phones.

“We’re expecting to see not only 3G replacement drive the lower end of the market, but consumers upgrading from4G to 5G, which reached 1.96m units for Q2, to help boost higher-value segments as people look to enhance their online experience,” saysSenior Analyst Glen Cardoza. “This is good news for the mid-end of the market, which today delivers some incredible value in terms of specs.”

“We are also keeping our eye on e-sports and聪明的phone gaming in the region. We expect specs to support this type of gaming to become mainstream across mid-end devices. Hence, beyond5G, we see this as another upgrade driver, particularly amongst younger users – a massive demographic in Indonesia.”

Background:

Analyst Contacts:

Febriman Abdillah

Glen Cardoza

Follow Counterpoint Research

press(at)www.arena-ruc.com

Samsung Regains Top Position in Philippines Smartphone Market in Q3 2021

Hong Kong, Beijing, Taipei, Seoul, New Delhi, London, Boston, Toronto – November 24, 2021

ThePhilippines聪明的phone market saw a 9% YoY decline in Q3 2021, with Samsung regaining its top position, according toCounterpoint Research’s Monthly Philippines Channel Share Tracker.Southeast Asiawitnessed a fresh wave of COVID-19 during the quarter, causing supply chain constraints triggered by lockdowns and movement restrictions. This was also a major reason behind the decline of the overall Philippines smartphone market in Q3 2021.

Samsung stood first this quarter with a market share of 23%, followed by realme at 22%. The major growth catalyst in Samsung’s success was its mid-range series, which comes equipped with best-in-class specifications at an aggressive price point. The Galaxy A12 and Galaxy A21s were among the major contributors to Samsung’s growth trajectory. realme continued to strengthen its foothold in the e-commerce landscape while Vivo, driven by its Y series and huge discounts during the back-to-school promotions, secured the third position with a 17% market share. OPPO slipped to the fourth position with a 15% market share. Xiaomi retained its position among the top five with a market share of 13%.

Research Analyst Tanvi Sharmasaid, “Businesses tried to increase the pace of their digital efforts to keep up with the continued expansion of cashless payments and e-commerce. Smartphone brands offered heavy discounts and exclusive schemes in the 9.9 Super Brand Day Sale. Besides, consumers were seen rapidly moving towards 5G-enabled smartphones.”

Sharma added, “E-commerce growth will continue and is expected to sustain a long-term adoption of online channels. Shopee and Lazada are among the top e-commerce platforms, grabbing most online sales.”

Online retail platforms are increasingly playing a significant role in the purchase of mobile phones and other smart gadgets due to the ease of home delivery and payments they offer.

In Q3 2021, theonline channelcontributed 16% to the overall smartphone shipments across the region, registering a 13% increase YoY. In online channel sales,Xiaomiemerged as the leader with a 31% market share, followed byrealmeandSamsung.

5Gconnectivity continues to spread across the Philippines. 5G-enabled smartphones captured a 19% market share with 666% YoY growth during the quarter.Mobile services providerSmart Communicationsis aggressively deploying 5G technology, making it accessible for everyone with the release of Signature Plans+.Globe, another bigtelecom operatorin the region, has successfully conducted 5G SA (standalone) trials, getting close to offering the technology to consumers and enterprises.

Analyst Contacts:

Tanvi Sharma

Follow Counterpoint Research
press(at)www.arena-ruc.com

Southeast Asia Perks Up, Boosts Smartphones

Southeast Asia(SEA) has been showing consistent economic promise for a while now. The changing landscape is giving the聪明的phonesector a much-needed boost as well. Four players have a pivotal role in this sector.

Whilegovernmentsupport in key SEA countries has resulted in a faster rollout of5Ginfrastructure, most governments are currently focused onCOVID-19vaccination and jump-starting the economy. In the parallel,Thailandcontinues to concentrate on advanced5Gutilization, while countries likeIndonesia,PhilippinesandVietnamare focusing on solidifying their5Ginfrastructure and increasing coverage.

Operators

The main operators in the key SEA countries are not only concentrating on increasing their 5G coverage but also making sure they sustain a healthy4G网络。农村重点是帮助他们提高subscription levels as well. Their consistent tie-ups with OEMs are giving a push to bundled packages and 5G (especially in metros and Tier I cities). This will continue to increase at a YoY level, even after Q4 2021.

From merging telecom operators inIndonesiato industrial applications being pursued in Thailand,5Gconnectivity is growing stronger in this region.

Even consumers who had not considered 5G during their most recent purchase of a smartphone, will consider it strongly in the future.

OEMs

New5G聪明的phone launches in the mid-tier price band have been all the rage in this region. The ASPs for these 5G phones will go down for upcoming models from top brands like realme. This will lead to an increase in upgrades.

Brands likeOPPO, Xiaomi andrealmeare adding consumerIoTproducts, like smart speakers, to purchase deals which is good exposure for their IoT portfolio in these markets. For brands likeXiaomi,IoTsegment makes up 10% of total revenue in some markets.

As the markets open, brands are also increasing their offline footprint. Xiaomi is looking to increase its sales outlets from 38 to more than 100 within this year. The brand is also making sure its after-sales network is geographically widespread. Xiaomi and realme stand out here.

E-commerce

The “9.9”shopping festivalsaw some big investments and celebrity endorsements ononlineplatforms likeShopee. Other big players across SEA, likeLazadaandTokopedia,also spent on marketing campaigns and tie-ups with brands, events and celebrities.

Online salesare one of the biggest reasons for consumers to indulge in shopping towards the end of the year.

Whether it is ‘live shopping’ on Tokopedia or increasing Korean influence with music groups like BTS, consumers can relate to this association. The main SEA economies may see their highest ever online smartphone shipments in Q4 2021. WithCOVID-19在大多数海洋国家,感染率下降the only deterrent here iscomponent shortagesaffecting supply.

Manufacturing

Q3 2021 saw governments in Indonesia and Vietnam giving emphasis to essential items. As infection rates went down in August and September, vaccination for themanufacturingsector was given priority. Starting September, most production facilities inVietnamresumed normal operations and scaled up to make provisions for Q4 demand.

All the above factors play in favor of a very productive and lucrative smartphone season in Q4 2021. All key SEA countries are likely to show more than 20% growth over Q3 2021 and a healthy YoY increase as well. Indonesia,ThailandandPhilippineswill show a higher online share in smartphone shipments.

Online Channel Share in the Chinese Smartphone Market Grew in Q3 2019

Combined market share of Huawei and HONOR accounted for 46% of online market share in Q3 2019, reaching an all time high.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –

Dec 23rd, 2019

China’s online smartphone sales increased to 27% of total sales in Q3 2019 from24% in Q1 2019, according to the latest research from Counterpoint’s China Channel Service. China’s smartphone market continued its slowdown due to the sluggish economy and consumers delaying smartphone purchases for 5G network rollouts.China’s smartphone salesin Q3 2019 registered a 5% YoY decline, but increased 3% QoQ but while China’s smartphone market continued its slowdown, the decline has narrowed in YoY terms.

Exhibit 1: China’s Mobile E-Commerce Market Share by Brand – Q3 2019

This was the first time that online smartphone sales increased during a quarter when there were no major e-commerce festivals. The surge in online sales was mainly attributed to rising online sales of Huawei and HONOR, which have been aggressively expanding domestic sales across all channels. The dual brands have popular offerings across all price brands, from the high-end Mate 30 and P30 series, mid-end Nova 5 series and low-end Honor 9X series. The combined market share of Huawei and HONOR accounted for 46% of the online market share in Q3 2019.

Major OEMs have all been expanding their reach in online channels. Vivo’s strategy to penetrate into online channels through the launch of the online-focused Z series, starting in 2018, has paid off. Vivo’s online market share has increased from 7% in Q1 2019 to 10% in Q3 2019. Seeing the success of the budget Z series in online channels, vivo added a mid-to-high end iQOO series targeting online channels in 2019.

Though OPPO’s online market share was flat, it has also launched an online focused K series as well as a separate Realme brand focusing on online market. However, the expansion into online channels for brands which are traditionally strong in offline channels has created more challenges for Xiaomi, which saw its online market share drop below 20% for the first time.

Exhibit 2: China’s Mobile E-Commerce Market Share by Platform – Q3 2019

平台的性能、JD和淘宝商城快速眼动ained the two largest online retail players, accounting for 49% and 21% of market share in online smartphone sales, respectively. The two platforms’ large customer base along with strong connections with brands helped to secure their top positions in the online space. Nevertheless, third party platforms such as Pinduoduo continue to gain market share with sizable subsidy campaign of RMB 10 bn (roughly US$ 1.4 bn) throughout the year. Pinduoduo offered the most attractive discounts for iPhones among all the platforms. On Pinduoduo, discounts of RMB 500, 700 and 900 (roughly US$71, $100, $128) are given for iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max, respectively. At the moment, iPhones are the most popular models sold in Pinduoduo’s smartphone category. With its growing presence in China’s e-commerce markets, we expect thatPinduoduowill further grow its market share in online smartphone retail through deepening cooperation with leading Chinese smartphone OEMs.

Online smartphone sales are expected to further increase in Q4 2019 as both 11.11 and 12.12 e-commerce festivals take place during the quarter. We also expect the online smartphone retail space to become more consolidated going forward.

Analyst Contacts:

Ethan Qi

Counterpoint Research

Smartphone Online Channel Shipments Share Reached Highest Ever in India During Q3 2019

Overview:

Smartphone shipmentsin the online channel reached their highest ever share of 46% during Q3 2019, according to the latest research from Counterpoint’sMarket Monitorservice. Online channel shipments grew 55% year-on-year (YoY) in Q3 2019 driven by new launches and aggressive sell-in ahead of annual online sales like Flipkart’s Big Billion and Amazon’s Great India festive season sale. As a result of this, both Flipkart and Amazon reached their highest ever quarterly smartphone shipments in the online segment.

Flipkart led the overall online market with a 57% share, Amazon grew faster (+75% YoY) to capture 33% share within overall online channels. realme and Xiaomi were the best-selling brands on Flipkart while Xiaomi, Samsung and OnePlus drove Amazon’s growth. The growth and maturity of online channels, byserving more zip codesthan ever, coupled with greater customer service, attractive promotions from discounts, tocashback, to EMI and exchange offershelped brands like Xiaomi and realme to take a lead in the online segment.

Within smartphone brands, Xiaomi retained the top spot in the online channels, with 38% share,driven by the strong performance of its Redmi 7A, Note 7 Pro and Note 7S models. Festive offers brought down the entry-level price-point of Xiaomi Redmi series to ~$70 (INR 4999) leading to a strong uptick on Amazon.

realme online shipmentshit arecord highwith more than 4.5x YoY growth as it focused aggressively in sub $200 segment with some industry-first device features like 64MP camera.Samsung gained share in the online segmentdriven by success of itsM30s model on Amazon, due to its long battery life (6000mAH) in the budget segment.

Vivo became the number four playerin the online segment for the first time ever, driven by its increased focus towards the online channel with its recently launched models,U10, Z1X, and Z1 Pro.

Online shipments in thepremium segmentreached a record highwith 79% YoY growth.OnePlus remained strong on Amazon这已经帮助该品牌保持# 1的球员in the online premium segment.

This article examines recent online smartphone market trends along with the competitive landscape of the online platforms in Q3 2019.

Author:Anshika Jain
Published Date: November 2019

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The Rise of Pinduoduo: The New E-Commerce Challenger in China

It came as a surprise when Pinduoduo, a four-year-old e-commerce platform, started to challenge the duopoly ofJD.com and Alibaba in China. Founded by an ex-Google engineer Colin Huang in Shanghai in September 2015, Pinduoduo made its debut on NASDAQ in July 2018. The company’s business model is different from traditional e-commerce platforms and uses a ‘Disney + Costco’ model, which combines elements of entertainment and value into sales. It provides a more interactive shopping experience for customers by offering discounts when they make group orders with friends or family.

There are several reasons for the rise of Pinduoduo in such a short time. The following is a closer look at some of these factors：

Increasing penetration of internet users in rural areas

China’s increasing internet users in rural areas provides a fertile ground for the development of e-commerce platforms like Pinduoduo, which is more focused in lower-tier cities and rural areas. According to the latest statistics from CNNIC (China Internet Network Information Center), the number of internet users in Chinese rural areas reached 209 million while internet penetration has significantly increased to 36% at the end of 2017, compared to just 7.4% in 2007.

China’s large and fragmented consumer market

Given how large and fragmented China’s consumer market is, Pinduoduo’s initial strategy was to tap into lower-tier cities and rural markets. Pinduoduo carries more affordable products that are often unbranded or white-labeled. It quickly became a success in China’s less urbanized areas, where consumers are more price-sensitive and care less about brands. Despite China’s rising income per capita, there is still a significant discrepancy in income levels in urban versus rural areas. GDP per capita in China’s top tier cities is 5.2 times more than that in third-tier cities, based on data from NBS (National Bureau of Statistics). Pinduoduo expanded quickly with the right products in the right markets. Building on its initial success, Pinduoduo has also gradually entered top-tier cities.

Ubiquitous use of WeChat in China

WeChat is China’s most popular messaging app with over one billion users in the country. With Tencent being one of the investors for Pinduoduo, the company easily shared links on discounts through the WeChat platform. This level of access on WeChat is not allowed for Tencent’s rival Alibaba. Many netizens in China’s rural areas have just started to use mobile internet and find it much easier to navigate on Pinduoduo and make the payment directly through WeChat. Using Alibaba’s platform requires an extra step to set up Alipay and is challenging, especially for elderly users.

Exhibit 1: Annual Active Customers of E-Commerce Platforms in China

Source: Company filings

Pinduoduoposted strong earnings in Q2 2019, beating market expectations. Revenue jumped to RMB 7.29 billion (roughly US$1.02 billion), an increase of 169% YoY. Net loss also narrowed to RMB 1 billion (roughly US$141 million) from RMB 6.5 billion (roughly US$917 million) in the same period last year. Pinduoduo’s current annual active customers as of Q2 2019 reached 483 million, surpassing that of JD.com. Though Pinduduo continues to make losses, it has the potential to turn profitable if it gets enough scale in China’s e-commerce market.

Editor’s Note: Pinduoduo reported its numbers in RMB. The conversion rate we have used is US$1 = RMB 7.08.

Smartphone Sales Grow 4% YoY During the Latest ‘618 E-Commerce Festival’

The popularity of third-party app platforms for shopping is increasing, especially across China’s lower-tier cities.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –

July 29th, 2019

Due to aslowing smartphone market, smartphone sales during the 2019 edition of the annual 618 e-commerce festival in China grew 4% year-on-year (YoY) to 13 million units, based on data from Counterpoint’s China Channel services. This is due to heavy promotion activity from platforms and OEMs during the festival. The 618 e-commerce festival, first initiated by JD.com, has now become a major sales event in China and is comparable to the Singles’ Day sale for online retailers. The 618 festival now lasts for more than two weeks, with an extended period of promotions running from June 1st to June 18th.

According toMengmeng Zhang,Research Analystat Counterpoint, “JD and Tmall were still the two largest players during the 618 festival, accounting for 54% and 23% of market share in the mobile phone category, respectively. However, we are seeingthird-party app platformsPinduoduoplaying a greater role in the 618 festival with its large userbase in lower-tier cities across China. Pinduoduo splurged RMB 10 billion (roughly US$ 1.45 billion) as subsidies on more than 10,000 products during the festival. With attractive discounts of nearly 30% on selected iPhone models, sales for iPhones crossed more than 300,000 units during the entire 618 festival period.”

Exhibit 1: China’s mobile e-commerce market share by platform, from June 1-18, 2019

Exhibit 2: Market share of China smartphone market on e-commerce channels, by brand, from June 1-18, 2019

Commenting on the performance of OEMs,James Yan,Research Director在对比研究说:“很少有changes in the top four players of the market. However, there has been increasing competition among other OEMs to secure the remaining top slots in the online market. Realme, a sub-brand of OPPO, which achieved success in India, entered China in April and immediately climbed into the top-selling list. Realme stresses on its high cost-to-performance ratio and is particularly attractive for online markets. In addition, OnePlus, with its exclusive JD partnership, also had a strong performance during this year’s 618 festival.”

Ethan Qi,Senior Research Analystat Counterpoint Research, added, “As for the top 10 best-selling models, HONOR was the biggest winner this year occupying a total of six slots. Further, we saw a wider price band distribution in the top 10 best-selling list this year compared to previous years, where it was predominantly smartphones around RMB 1,000 (roughly US$ 145). When we expand the list to the top 20 best-selling list, we see an even wider price band. There were nine models priced above RMB 2,000 (roughly US$300) based on JD’s top 20 sellers’ list.”

Exhibit 3: Top 10 best-selling models during the 618 e-commerce festival, from June 1- 18, 2019

More Analysis on Brands During the 618 Festival:

During this year’s 618 festival, the top six brands (HONOR, Xiaomi, Huawei, Apple, OPPO, and Vivo) accounted for 85% of the market share.
HONOR has solidified its position as the best-selling online smartphone brand, capturing 27% of the market.
With the trade ban hurting Huawei’s business in overseas markets, Huawei and HONOR have shifted focus to domestic markets. HONOR offered a heavier discount compared to Xiaomi this year, while Huawei’s P30 series achieved strong performance with both online and offline retailers during the 618 festival.
The gap between HONOR and Xiaomi has widened this year as Xiaomi faces tougher competition from HONOR, as well as online-focused models from OPPO and Vivo. Nonetheless, Xiaomi has moved up the value chain with more of its flagship models entering the top-selling list, i.e., Xiaomi 9 and Redmi K20 Pro.
Vivo’s determination in putting more efforts into online channels has paid off with sales during June 1 and June 18 increasing 121% YoY. Vivo’s special gift boxes with different themes for various platforms were all sold out.
Apple showed stronger performance during the 618 festival period compared to Q1 2019. With sales declining in China, Apple started offering hefty promotions on various platforms. The iPhone XR had the best deals and among the top three best-selling models during this year’s festival.

Analyst Contacts:

Mengmeng Zhang

James Yan闫占孟

Tarun Pathak

Flora Tang

Counterpoint Research
press(at)www.arena-ruc.com

You can alsovisit our Data Section(updated quarterly) to view smartphone market shareGloballyand fromthe USA,ChinaandIndia

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