Kantar examines: Xiaomi and Oppo rise following Huawei’s fall
Everything was going well and according to the objectives of the officials Huawei , it was not unlikely that this company will soon become the largest smartphone supplier in the world by taking over Samsung’s position. But the new policies of the US government during Trump’s presidency and the trade war between China and the US went hand in hand until in May 2019, Huawei was blacklisted by the US Department of Commerce be placed Google subsequently refused to provide GMS services to Huawei. In this way, the exclusion of some popular Google applications caused the company’s smartphones to fall from the eyes of many users. Now that about 3 years have passed since the embargo against Huawei, the situation is very different. In the twelve months ending January 2022, Huawei has lost 7.4 million customers.
Of course, the volume of fixed customers Huawei is still significant and only 25 million of them are in EU5 countries. Currently, the time has come to upgrade the smartphones of many of these customers or they are on the verge of it. On average, Europeans buy a new phone every 2.5 years. More than half of Huawei customers have spent 2.5 years or more since they last bought a new phone. According to Kantar, currently only 13% of these people will buy Huawei phones again. In this way, a golden opportunity has been provided for competitors to use this gap in the best way.
As a famous saying goes, when one door closes, another will open. Following the Europeans’ major shift away from Huawei, Chinese brands Xiaomi and Oppo have experienced strong growth in Europe. A recent Kantar report suggests that 23% of Xiaomi’s EU5 smartphone market share is thanks to former Huawei customers. This figure for the Oppo brand is reported to be 28%. Considering that this year, more Huawei customers are leaving this brand, it is expected that the opportunity for other brands will increase.
Statistics show that currently Currently, 13% of all active smartphones in 5 countries, France, Germany, Great Britain, Italy and Spain belong to the Xiaomi brand. It is interesting to know that Xiaomi holds the first place in this country with 33% of the smartphone market share in Spain, and it ranks second in Italy (with 19% of the market share). But, what is really the secret of Xiaomi’s success in Europe?
The secret of Xiaomi’s success in Europe
Undoubtedly, competitive prices are one of the most important success factors Xiaomi Lei Jun, the founder of Xiaomi, has capped the net profit margin of the company’s products (including smartphones) at a maximum of 5%. This has made Xiaomi incredibly competitive in the market of cheap phones, so that 90% of active Xiaomi devices are in the price range of 400 euros and less. Of course, if we look at the matter from another angle, this is considered a weakness for Xiaomi, because apparently Xiaomi does not have much control over the market of advanced and flagship devices in Europe. It’s good to know, the first advanced smartphone that Huawei successfully launched in Europe P20 (with a price of 650 euros) was able to stabilize Huawei’s position in the British market.
Another secret of Xiaomi’s progress is the company’s focus on research and development (R&D) and innovation for smartphones; A category that Xiaomi refers to as ABCD or smartphone alphabet and considers 4 audio components, battery, camera and display to be among the elements of a successful smartphone. This strategy seems to have worked, as 55% of Xiaomi phone owners cited long battery life as the main reason for their choice. Camera quality (51%), screen size (44%) and internal memory (40%) are other reasons for buying Xiaomi devices.
The challenge remains
As we said, Xiaomi has performed brilliantly in Spain, with more than 33% of Xiaomi phone owners in the country having owned it for more than 2 years. They have kept their device. But the new challenge that Xiaomi is facing is to keep these users loyal to the Xiaomi brand. In the twelve months to January 2022, about 68 percent of Xiaomi phone owners who purchased a new phone remained loyal to the Xiaomi brand. Of course, according to Kantar experts, this loyalty rate has decreased compared to the same period last year, and this decrease will probably increase in the future. It is expected that users who migrate from Xiaomi will mainly go to Samsung or even to Apple and Oppo migrate. Also, these users are willing to pay more for their next phone (probably 25% of them will buy a smartphone for more than 800 euros).
Oppo; Promising brand
Migration from Huawei is expected to intensify throughout 2022 take and provide the right opportunity to existing brands (and new brands). Definitely one of these brands will be Opo. In the twelve months to January 2022, Oppo has expanded its share of the continent’s smartphone market by attracting 2.5 million new customers in Europe. Oppo introduced its new flagship (series Find X5) on February 24 2022 (March 5, 1400), started the new year strong.
Opo’s strategy seems to lean more towards high-end phones overall as 8% of the company’s device owners have already spent more than €800 on their smartphone. 10 percent of new Oppo customers migrated from Xiaomi to the brand (in contrast, users who migrated from Oppo to Xiaomi were less than 1 percent). This indicates the acceleration of Oppo’s growth.