US Insights

How are Chinese smartphone brands faring globally?

Martin Guo

Editor-in-Chief, Kantar China Insights

Mobile 04.05.2019 / 09:00

CN smartphone going global

Most Chinese brands lag well behind foreign rivals.

WPP and Kantar recently jointly launched 2019 BrandZ™ Top 50 Chinese Global Brand Builders Ranking report in Beijing. The report has pointed out that the challenges faced by all Chinese brands seeking a global audience are similar in many ways. There are market forces and competitive sets to be understood, consumer habits and preferences to be explored, and the most effective communications tools utilized in a targeted, creative and locally relevant way.

Yet, the detail of the challenge – and, therefore, the best route to market – does vary quite significantly between different business sectors. This year’s report has included a “deep dive” into three hot categories for Chinese brands: mobile gaming, e-commerce and smartphones. This article is the in-depth analysis and actionable advices for the smartphone category.

Market wrap

Global demand for smartphones has been in steady decline for over a year – but not because people don’t love smartphones. Rather, it’s the case that in many mature markets, penetration is at saturation point and the appetite for upgrading has slowed, in part due to economic instability.

The good news, however, is that when people are buying a smartphone, they’re increasingly opting for a Chinese brand. According to IDC (Worldwide Quarterly Mobile Phone Tracker), the big three Chinese smartphone brands are bucking the global trend and are all steadily gaining market share.

Action points for growth

1. Get the basics right

Ease of use, value for money, overall good quality and a trusted brand are considered “hygiene factors” for consumers – they’re a must if a brand is to even be considered.

2. Go above and beyond

After the basics are satisfied, consumers are shopping around for the superior product functions; they say great features and outstanding performance powered by advanced technology help set a brand apart in their minds.

3. Explore the hidden opportunity

What they don’t say, but what we can see in the data has a strong effect on purchasing, is that design and brand communication really matter. Consumers seek out a brand they want to be seen using, and this is linked to fame and great advertising.

EN Smartphone Consideration Factors

The China factor

Smartphones are a high-value purchase, so consumers need to be reassured about quality and brand reputation. Most Chinese brands lag well behind their international competitors on our consumer survey about product features, design, and communications. But the chart below shows this need not be the case.

This year’s Number One Global Brand Builder, Huawei, shows how Chinese brands can shine. It leads other Chinese brands on a wide spectrum of perceptions around product and brand, and even rivals the global giants. Other smartphone brands need to have a twin focus: fame and building perceptions of quality.

EN Chinese Smartphone Brand Position

In summary

Demand for smartphones is slowing, but Chinese brands are gaining market share.

Brand differentiation comes via outstanding technological features and performance. Attractive design and a distinctive brand image that reflects well on a smartphone user are other ways to stand out. Communication of all differentiating strengths is essential for growth.

With the exception of Huawei (not including Honor), Chinese brands need to make a big effort to close the gap between how global consumers see them as compared to international brands. Huawei, meanwhile, needs to continue its efforts to promote its product strengths and brand image.

To know more about Kantar’s strategic advices for Chinese brands going global, please download the report here.

Source: Kantar

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