Chinese brands now make up the majority of the Russian smartphone market just three months after the world’s leading smartphone makers Apple and Samsung pulled out of the country following Russia’s invasion of Ukraine.
Xiaomi, Realme, Honor (a spin-off of smartphone maker Huawei) and Oppo now hold 61% of the Russian smartphone market by sales in May 2022, up from 44% a year earlier, according to new data from the company. smartphone consulting firm Counterpoint Research. Realme, a Shenzhen-based Android smartphone brand, saw the biggest increase among its Chinese peers. Its Russian market share increased to 12% in May from 4% in May 2021. Realme sold 1.1 million phones in Russia in the first six months of 2022, compared to 498,000 in the first half of 2021, figures show. of Marvel Distribution, a Russian electronics and software distribution company.
Meanwhile, Samsung’s Russian market share, as measured by sales, fell to 18% from 31%, while Apple’s fell to 5% from 11% year-on-year. Prior to Feb. 24, the two companies accounted for almost half of the Russian smartphone market, measured by sales, shipment volume and revenue.
Russia’s smartphone adoption rate ranks third in the world, after the United States and Germany, with more than 70% of the population owning a mobile phone. However, overall smartphone sales in Russia were down nearly 60% in May from a year earlier due to limited supply and the country’s economic crisis, leaving Russians with less money to spend. .
The “most attractive” feature of Chinese smartphones in Russia is their availability; that’s why they gained market share in Russia in a short time, says Ben Wood, chief analyst at smartphone consultancy CCS Insight. Inventories of Apple and Samsung devices fell.
The popularity of Chinese smartphone brands has also exploded in Russia in recent years due to sleek device designs and lower prices than Apple and Samsung. Chinese smartphones generally offer “a lot of value” to consumers because of their competitive prices and rich features, Wood said. For example, Xiaomi recently launched its 11i Hypercharge smartphone which can be fully charged in less than 20 minutes. Huawei’s P50 Pro is considered one of the best smartphone cameras on the market, comparable to Apple’s iPhone 13 Pro, Samsung’s Galaxy S22 and Google’s Pixel 6 Pro.
Chinese smartphones are “no longer seen as inferior alternatives to Apple and Samsung,” says Jan Stryjak, associate director at Counterpoint Research. Apple and Samsung are unlikely to return to the Russian market anytime soon, creating a “window of opportunity” for Chinese manufacturers to continue taking market share, Wood said. Chinese smartphone makers already hold more than 30% of the global smartphone market share, compared to 23% for Samsung and 18% for Apple. Mainland Chinese brands do particularly well in regions where Apple doesn’t have a big presence or stronghold like in Latin America. In this region, Xiaomi has captured a market share of 12%, compared to 5% for Apple. Xiaomi has also done well in “price-conscious” European markets like Spain and Italy, where it has 30% and 15% of each country’s market share, respectively, according to Stryjak.
At the same time, Chinese smartphone makers are facing a new headwind from Russia’s recent permission for parallel imports. The temporary law, enacted in June to ease a shortage of smartphones, allows retailers to import mobile devices from brands that left Russia through unofficial distribution channels. Russian smartphone retailers like Svyaznoy and DNS now bring Apple iPhones and Samsung Galaxy phones into the country from places like Kazakhstan, and the government collects taxes on their secondary sales.
Apple and Samsung retain their prestige with Russian consumers. In case Apple and Samsung have restarted official shipments to Russia, it’s likely they’ll stage a quick recovery, Stryjak says.
Chinese companies are taking a “calculated risk” by continuing to supply the Russian market, Wood says. Since Russia’s invasion of Ukraine on February 24, Beijing has been concerned about the possibility of triggering secondary US sanctions against Chinese companies still operating in Russia. Last week, US officials banned five Chinese companies from buying US technology over their alleged support for the Russian military – the first action the US government has taken against Chinese companies under the Russia’s war against Ukraine.
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