China Mobile Phone Market

Foreign Brand in China

China is the biggest mobile phone market in the world. There were more than 2 billon mobile phones been sold in 2010. Now, all the main cell phone brands in the world treat China as their most important market. Today, foreign brand already win the huge leading advance in China market. The data shows that, the top10 brands in China have taken almost 90% of the market share, but 9 of them are foreign brands, which represent 86% of the market share.

Source: ZDC, http://zdc.zol.com.cn/

The success of foreign brand is reasonable because they have big advantages in almost all the aspects. For example, the core technologies and components of mobile phone are all developed by foreign companies. Chinese companies have to buy the technology and key components from foreign company to develop their products. This means the Chinese companies cannot compete with foreign companies on technology aspect. Also, foreign companies have sufficient financial advantage compare with Chinese companies. They can do lots of advertisements and other actions to promote their brand image and to expand the sales channel.

Under this situation, to compete with these foreign brands, Chinese brands have to sale their product with lower price. This strategy may attract some low income people, but it put the negative effect on Chinese brands. Now, majority of people think that the Chinese brands equal to low quality and low end. On the other side, foreign brands also start to pay more attention to the low price market, their low end products have the similar price level to Chinese brand (lower than 1000 RMB) but with higher quality and reliability. In 2010, Nokia's market share in low end market is 39.4%. The recent data shows that in the low end market (price less than1000 RMB), foreign brand still take majority market share.