According to International Data Corporation’s (IDC) Asia/Pacific Quarterly Mobile Phone Tracker, 4 million smartphones were shipped to the Philippines in Q2 2017, posting a year-on-year decline of 10%.
Market Disruption by OPPO and VIVO
“OPPO and vivo disrupted the smartphone retail space through cash-rich marketing, aggressive sales promoter incentives and previously unseen levels of retailer support. This challenged the traditional vendor-dealer relationship smartphone vendors have been accustomed to, and while leading vendors have been able to adapt, smaller players with less marketing and merchandising budget on their disposal were unable to do so, thus suffering drops in market shares” says Jerome Dominguez, Market Analyst for Client Devices, IDC Asia/Pacific.
The rise of OPPO and Vivo further affirmed the importance of combining an expansive sales and distribution approach with strong marketing and advertising strategies to capture consumer mindshare. To preserve brand equity among consumers, leading global and local vendors who have previously cut down on marketing spend back in 2016 were seen to divert their resources to funding actively on integrated marketing campaigns this year.
Local vs Global vendors
Local vendor share of the smartphone market was down to 41% in Q2 2017 from 49% during the same period last year.
Global vendor shares of the smartphone market in the Philippines remained flat at 27% compared to a year ago, with only Samsung as the only strong performer. Meanwhile, Chinese vendor shares jumped from 15% to 22% YoY.
Q2 2017 Top 5 Vendors in the Philippines
Cherry Mobile maintained its lead in the smartphone market, with below US$50 smartphones still driving its volume high. In response to heavy promotions from global and Chinese vendors, it further beefed up its marketing spend with more notable ad placements and airtime on popular noontime shows.
Samsung came in at 2nd, with the J series making up the majority of its shipments for the 1st half of 2017. It also laid more focus on improving above-the-line marketing and sales promoter incentives in light of the rapid rise of Chinese vendors.
OPPO finished as the 3rd biggest vendor as its growth was related to an aggressive approach in marketing, merchandising and sales. Along with Samsung and Vivo, it has also benefited from its partnership with Home Credit, allowing it to offer its smartphones at 0% interest installment without the credit card requirement, which made its offerings more accessible to mass market consumers.
Cloudfone ends at the 4th position. Its marketing and promotions focused on sports events given its partnerships with NBA and PBA. Its aggressive play on the below-US$25 segment drove its volume for the quarter.
Vivo takes the 5th position, growing 66% quarter-over-quarter. The Stephen Curry endorsement further helped cement its brand presence on the local scene. Roadshows were also aplenty, with Vivo Perfect Selfie Tour covering most of the major malls in Manila and other key cities.