JD.com and Tmall.com accounted for 70% of the online smartphone marketplace, but their market shares declined slightly

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

July 8th, 2019

The share of online sales in China’s smartphone market decreased to 24% in Q1 2019 from 28% in Q4 2018, according to the latest research from Counterpoint’s China Channel Service. Further, China’s smartphone market continued its slowdown from H2 2018 due to sluggish demand from consumers as well as seasonality, with factories being closed down for the Chinese New Year Holidays. Sales in Q1 2019 registered an 8% year-on-year (YoY) decline, based on Counterpoint’s Market Monitor Report. Commenting on the online smartphone marketplace, Mengmeng Zhang, Research Analyst at Counterpoint Research said, “JD.com and Tmall.com continued to be number one and number two online smartphone platforms in China, respectively. Together, the two giants dominated more than 70% of the online smartphone marketplace. However, their market shares declined slightly Q1 2019 as there were no online e-commerce festivals in this quarter and the offline channel performed stronger during the Chinese New Year season.” Meanwhile, third-party app platforms have started to play an important role in the online smartphone marketplace. Popular app platforms such as Pinduoduo, Vipshop, and Xiaohongshu have started to carry a variety of brands in their marketplace. According to James Yan, Research Director at Counterpoint, “Along with JD, Tmall, and Suning, these apps have become the official online retailers for new model releases. The importance of these third-party apps cannot be underestimated as an important marketing channel for OEMs due to the large userbase of these apps. In addition, third-party apps can bundle sale smartphones with other products. For example, Vipshop offered a joint sale of Vivo and iQOO with Daniel Wellington bracelets.”

Exhibit 1: China’s Mobile E-commerce Market Share by Platform – Q1 2019

Exhibit 2: China’s Mobile E-commerce Market Share by Brand – Q1 2019

Our Performance Analysis of Brands in E-commerce Channels:

In Q1 2019, the top six brands (Honor, Xiaomi, Apple, and Huawei) accounted for 84% of the market.
HONOR retained the title of the number one online smartphone brand in China, capturing 24% of the market.
Huawei’s online market share increased in Q1 as it tries to strengthen its online channel amid an overall market slowdown. Huawei and HONOR’s brand positioning regarding offline versus online channels is becoming blurry. Both brands are trying to increase their sales by attacking their weak points. Huawei has expanded into more online channels, while HONOR has expanded into more offline channels.
Xiaomi’s online market share increased in Q1 owing to strong demand for the Redmi Note 7, which came at a time when major OEMs did not have new product launches. Redmi Note 7 was the first model under the Redmi brand after it became an independent brand and offered great specs at an affordable price.
OPPO and Vivo continued to expand into online channels. After achieving initial success with online focused budget smartphones, such as Vivo Z series and OPPO K series, the two brands are venturing into launching flagship models in online channels.

Analyst Contacts: Mengmeng Zhang +86 18611804269 mengmeng@counterpointresearch.com James Yan闫占孟 +86 15810182576 james@counterpointresearch.com Tarun Pathak +91 9971213665 tarun@counterpointresearch.com Flora Tang +852 5545 2529 flora@counterpointresearch.com Counterpoint Research +852 8191 4813 press(at)counterpointresearch.com

Online Channel Share in the Chinese Smartphone Market Declines in Q1 2019

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