In the second quarter of 2022, Southeast Asia shipped 24.5 million smartphones, down 7% from the first quarter. Inflation continues to rise, which has seriously hit consumer confidence

In the second quarter of 2022, Southeast Asia shipped 24.5 million smartphones, down 7% from the first quarter. Inflation continued to rise, which seriously hit consumer confidence. In a more price sensitive market, manufacturers are trying to make equipment pricing more user-friendly. The huge macroeconomic resistance has caused the industry to stagnate in the five major markets in Southeast Asia, seriously affecting the local consumption demand. In the second quarter, although Malaysia and Indonesia held celebrations of Ramadan season, the month on month growth reached 6% and 2% respectively, lower than expected. Consumption in the Philippines increased during the election period, and the market increased by 4% compared with the previous quarter. Affected by the sharp depreciation of the Thai baht, the performance of the Thai market decreased by 14% compared with the previous quarter. At the same time, due to the increase of uncertainty faced by consumers, the shipment in Vietnam market decreased by 20% month on month.

Main market trends 

Indonesia

Indonesia is still the largest market in Southeast Asia, with a market share of 37%。 During the Ramadan Festival, the shipment volume was pushed up to 9.1 million driven by the holiday bonus. Samsung leads the market with 20% market share. Vivo has strengthened the promotion of retail and online sales channels, ranking second with a market share of 19%. Chuanyin increased the promotion of infinix online brand, and surpassed realme for the first time in the Indonesian market, ranking fifth. Infinix's hot series priced below $200 has attracted many consumers.

the Philippines

Shipment in Philippine Market4.4 million, maintaining its position as the second largest smartphone market in Southeast Asia. In the second quarter, manufacturers increased their promotional activities, and the shipment volume increased by 4% compared with the previous quarter. Realme has gone deep into the mass market with the C35 series of affordable machines. Through the narzo series of online promotion activities, realme has won the title of shipping champion again. Although the performance of Chuanyin in the second quarter experienced a slight decline compared with the previous quarter, it successfully met the needs of offline consumers in second tier cities to build the confidence of dealers. Meanwhile, Xiaomi and oppo increased by 10% and 55% respectively over the previous quarter. Hongmi 10 series is more popular with offline consumers, and its sales are very hot, which is also an important driving factor for the surge of Xiaomi shipments.

Thailand

Affected by the devaluation of Thai baht, inflation and slow economic recovery, the smartphone market in the country has declined month on month 14% to 4 million. However, Xiaomi's model that wins by volume is very popular with offline consumers, which also makes the brand recover from the first quarter. Smartphone manufacturers are trying to optimize the efficiency of Thailand's channels and reduce the pressure on profits. In order to stimulate consumers' willingness to purchase, Thai operators have increased the bundling and promotion efforts, but the results are different.

Vietnam

Due to the strengthening of global uncertainty and the rise of commodity prices, consumer demand has weakened, and the shipment volume of Vietnam's smartphone market has dropped sharply month on month 32%, down to 3.1 million. Samsung occupies 41% of the market share in Vietnam, which also makes the country a strategic country of Samsung. Samsung's cooperation with the major retailer "MobileWorld" has taken most of vinsmart's sales share in Vietnam, thus consolidating its dominant position in the market. Despite the quarterly pullback in smartphone shipments, Vietnam's medium and high-end market potential is still strong.

Malaysia

As the Eid al Fitr and promotional activities stimulated consumer demand, Malaysia's smartphone market shipments increased compared with the first quarter 6%, reaching 2.4 million. Samsung increased the number of channels to promote A-Series shipment. The rising commodity prices have led to a decline in the demand for medium and high-end smartphones, while the competition in the low-end smartphone market has intensified. Manufacturers are in a dilemma. On the one hand, they try to position themselves as economic brands in the high demand entry-level market; At the same time, we have to deal with the rising operating costs.

Manufacturer Performance 

Samsung middle and high end The demand for series a was lower than expected, resulting in a 19% decrease in the second quarter compared with the first quarter, but it still maintained its leading position in Southeast Asia. For the entry-level a series, Samsung launched a large number of marketing activities and channel incentives to regain the market share lost in the middle and low-end price segments. Samsung invested heavily in the online marketing activities of folding mobile phones and S22 series to prepare for the competition in the high-end market.

Oppo's performance is still strong, ranking second with 18% market share. This is due to the continuous hot sales of its a16 series, which has become the best-selling model in the Southeast Asian market. In 2021, oppo took the initiative to give up the market of models below $100 and fully promoted the Reno series, which also successfully improved the brand image to a certain extent. At the same time, oppo further strengthened its product portfolio and officially launched oneplus Nord Series in Southeast Asia.

Xiaomi's shipment volume in the second quarter was 4 million units, the same as last quarter, ranking third. Among the five major Southeast Asian markets, four markets achieved strong and sustained growth, mainly thanks to the newly launched red rice 10 series and the previous red rice 9 series. The poco F4 series launched by Xiaomi mainly relies on online sales. This sub brand creates a good reputation effect for Xiaomi and further improves its online shipment.

Vivo and realme both ranked in the top five, with shipments of 3.2 million and 2.6 million respectively. Vivo has launched a large number of new models in some strategic markets in Southeast Asia, such as T1 series and Y01 series, to meet the needs of a broader target group based on different price ranges. Realme launched an upgraded version of its flagship GT series in the second quarter, demonstrating its efforts to improve its brand.

With the gradual opening of the Southeast Asian market, consumers have increased their spending on leisure and daily needs, weakening their purchasing power for scientific and technological products, and medium and high-end models have been hit the most. However, due to economic uncertainty and rising inflation, Apple's performance continues to maintain a good momentum. Whether it's timely Both the Se series and the popular iPhone 13 series have consolidated Apple's leading position in the high-end market.

market prospect 

Chiew lexuan, research analyst at canalys, said: "Consumer demand for 5g products has entered a stagnant state. Among the total shipments of smartphones, the proportion of 5g products has dropped to 18% for the first time in a row. The deployment of 5g in the Southeast Asian market is not satisfactory, which also indicates that the sensation caused by 5g is not as good as before. At the same time, consumers' attention has shifted to other more practical aspects, such as battery life, storage space, processor speed and camera quality. Due to inflation Inflation is increasing, and consumers prefer affordable and durable configurations to those with poor practicability such as 5g. The 4G network speed is enough to meet daily needs, and the actual use of 5g remains to be seen. Therefore, it is not necessary for medium and low-end products to carry 5g.

"For manufacturers, it is the biggest challenge to keep the equipment price low while improving the profitability. With the introduction of more new products by Android smartphone manufacturers, the competition in the entry-level mobile phone market is intensifying. It is a crucial measure for manufacturers to continuously optimize the product portfolio to improve the brand and increase the promotion. In addition, manufacturers should also pay attention to reducing the competition between their own products in the same pricing range. But in general, The remaining months of 2022 will be difficult for Smartphone manufacturers. They must take active measures to deal with such problems as rising costs, foreign exchange fluctuations and weak consumer demand. Manufacturers have to keep a close eye on profits and actively compete to seize market share in price sensitive Southeast Asia. "

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