Chinese language smartphone producers are intensifying efforts to achieve a stronger foothold in Europe and promote higher-margin premium units, with one of many world’s fastest-growing manufacturers aiming to greater than double its market share on the continent within the subsequent three years.
Shenzhen-based Realme, which has elevated European gross sales by 275 per cent from 2020 to final 12 months, in response to analysts, says it’s concentrating on a market share of greater than 10 per cent within the subsequent three to 5 years, up from 4 per cent.
At the moment the continent’s fourth largest provider, the handset maker grew to become the quickest ever to succeed in 100mn international cellphone shipments in 2021 and the fifth quickest to succeed in 200mn final 12 months, regardless of a slowdown within the smartphone market, in response to analysis from Tech Insights and Counterpoint Analysis.
“If Realme can obtain success within the European market then our entire model can be massively elevated and it’ll assist our gross sales globally,” stated Francis Wong, head of product advertising and marketing on the firm. “Our entire technique is to begin from the low finish and work our manner up.”
Nevertheless, he cautioned that advertising and marketing prices concerned in promoting to European prospects loyal to Apple and Samsung had been greater than 10 occasions greater than in India, the corporate‘s first main market when it grew to become an unbiased entity in 2018.
European shoppers are much less conscious of Chinese language manufacturers and fewer involved about worth for cash, that means the corporate’s progress had to date been slower on the continent than in different markets, the place it has doubled, tripled or quadrupled gross sales in just some years, he added.
“We’re used to that form of speedy progress. So after coming to Europe, we discovered that this market just isn’t as simple as we imagined,” stated Wong.
Apple and Samsung nonetheless dominate in Europe, particularly on the premium finish, in response to figures from Counterpoint. They accounted for 94 per cent of telephones bought over $700 within the second quarter of this 12 months. The final exterior challenger to say near 10 per cent of the European premium market was Huawei, which grew its share of gross sales quickly till it was regularly pushed out by US sanctions and bans in some international locations on the usage of the corporate’s gear in 5G networks from 2020.
Realme started life as an offshoot of Oppo, which itself was a model owned by electronics group BKK. The Dongguan-based conglomerate additionally spawned phonemakers Vivo and Oneplus. Oppo, the world’s fourth-largest producer by gross sales, noticed its progress stunted by a authorized battle with Nokia over patent rights in 2021, which pressured it right into a multiyear retreat from the continent.
However this 12 months, Chinese language smartphone makers say they’re making renewed efforts to spice up European gross sales, recognizing a chance to win market share with new applied sciences resembling foldable units, superior cameras and superfast chargers.
“We’ve seen Europe present a really open angle in direction of embracing each foldables and flips . . . that is actually a game-changer,” stated Tony Ran, Europe president for Shenzhen-based Honor, including that the continent was the corporate’s most necessary market outdoors China.
Within the second quarter, Honor overtook Samsung to turn out to be the primary vendor of foldable smartphones in western Europe, having entered the highest 5 sellers when it comes to general European market share the earlier quarter.
Ran stated that 60 per cent of European patrons of foldable telephones on the corporate’s on-line retailer had swapped over from “the duopoly” of Samsung or Apple units. Honor’s flagship foldable Magic V3 cellphone is pitched at a premium value of round €2,000, comparable with the €1,979 price ticket of the iPhone 16 Professional Max with 1TB storage.
In the meantime, Oppo stated final month it might launch its flagship Discover X8 sequence in Europe, marking a high-profile return for its premium model.
Billy Zhang, president for abroad advertising and marketing, gross sales and companies stated Oppo was “decided” to put money into the European market over the long run. Regardless of the challenges, he hoped shoppers would slowly get used to the Oppo model. “Step one is all the time painful,” he stated.
Xiaomi, lengthy the continent’s best-selling phonemaker behind Apple and Samsung, additionally elevated its share of the premium market to 4.3 per cent within the third quarter of 2024, up from 2.7 per cent in the identical interval final 12 months, in response to figures from IDC.
In jap Europe, beforehand lower-end challengers, resembling Transsion, a Chinese language producer that dominates in Africa, have additionally elevated their mid-end gross sales considerably.
Analysts warning that Chinese language producers have struggled to push their European market shares above about 4 per cent in recent times, whereas working up immense payments with aggressive advertising and marketing campaigns that embrace sponsorship of main sporting occasions such because the Champions League or French Open.
Realme’s market share progress, they added, was buoyed by gross sales in Russia, following Samsung and Apple’s exit after the full-scale invasion of Ukraine.
“For western Europe, they . . . make investments some huge cash to construct that model consciousness . . . however they don’t see numerous constructive returns,” stated Will Wong, an analyst at IDC.
Smartphone makers argue that the status of constructing it in a developed market like Europe may assist them in different high-end markets resembling Japan, Australia and the US, probably convincing operators to promote Chinese language telephones in these areas.
“We actually have to consider it from a long-term perspective,” stated Ran from Honor. “As soon as we will make it right here, you may make it wherever.”
