Canalys, a global technology market analyst firm published a report on February 11, 2019 showing Xiaomi (小米) has become the No.1 smartphone brand in Ukraine and top 5 smartphone vendors in west Europe.
Chinese smartphone vendors try to seek growth in Europe
One possible reason for why Chinese vendors dominate this top 5 list in Ukraine and expand their presence in Western Europe is the eager for Chinese smartphone companies to seek new opportunities since the growth smartphone at home market has slowed down and even gone negative. Till the fourth quarter of 2018, the Chinese smartphone market has suffered the seventh consecutive quarter of decline and a 15% year-on-year decrease.
Since there is a strong incentive for Chinese companies to find a new battlefield for increasing shipments, gaining market share and generating revenue, the competition among smartphone vendors in the targeted market is likely to get fiercer. However, the fierce competition in the smartphone field might mean smartphone vendors try to ship the possible maximum amount of phones, as a result, the smartphone users will increase accordingly. As there are more smartphone users, there might be more opportunities for various phone App developers, electronics manufacturing companies, tech companies providing advanced technologies, or phone accessory businesses.
More details on Xiaomi in Ukraine
By watching Ukraine’s top 5 favorite brand list, it can be noticed that four of them are Chinese smartphone vendors which are Huawei (华为), Meizu (魅族), and Honor (a sub-brand with more affordable pricing belong to Huawei). The other non-Chinese vendor is Samsung.
By market share, Xiaomi taking up 26.7% slightly surpasses the second-ranked Samsung taking up 26.5%.
A bit about Ukraine
Ukraine is the largest eastern European country next to the Black Sea with the total population of 43,876,979 and the urban population taking up 70.1 % as of Monday, February 11, 2019, United Nations estimates. 55.87% of its population aged 15-59.
Ukraine has a highly skilled but low-cost labor force and most importantly its strategical location with access to the Black Sea, Sea of Azov, and the Danube river which could help transport Chinese goods globally. Not only private companies are interested in Ukraine, but China state-backed capital is also interested in investing in Ukraine mainly in infrastructure. For example, the China Harbor Engineering company invested USD 40 million in making bigger ships access to Yuzhny port.
Ukraine has many smartphone users at a young age
LEAD9 Mobile Marketing agency and Kiev International Institute of Sociology collectively conducted a research showing
- 45% of adults in Ukraine use smartphones
- 91% of pooled participants aged 18-30 use smartphones
- From 2016-2018, the share of smartphone used in Ukraine has increased by 26% and expected to increase by 70% by 2020
The increase of smartphone users is due to the development of mobile internet and the presence of cheap phones.
Since more than 90% of teenagers are using smartphones now, and consider a smartphone normally would not upgrade his phone in a relatively short term. It might raise a question that if Ukraine smartphone market will soon become saturated and profit will plunge.
Moving on to the Western Europe market
Xiaomi ranks at the fifth place with the highest year-on-year growth of 415.5% among top 5 smartphone vendors in Western Europe.
In Western Europe, Xiaomi has entered Spain, France, Italy, the UK etc. The first Western Europe Xiaomi entered was Spain in 2017 and in the fourth quarter of 2018, it ranks at the third place with the total shipment of 2.8 million after Samsung and Huawei. While, its year-on-year growth is 273.4%, which is much higher than Samsung (-0.5%) and Huawei (36.8%).