Chinese phonemakers Oppo and Transsion seek growth in south-east Asia

Some of China’s leading smartphone makers are betting that a push into south-east Asia will pave the way for a recovery in sales next year as the return of Huawei heats up competition in their home market.

Oppo held the global launch of two premium foldable smartphones, the Find N3 and N3 Flip, in Singapore last month, the first time in 10 years it had chosen the city-state as its venue for such an event.

The world’s fourth-biggest smartphone maker sees foldable phones as essential for energising the saturated handset market for the next few years, said Elvis Zhou, Oppo’s overseas chief marketing officer.

Oppo’s smaller rival Tecno, owned by Transsion Holdings, has long focused on entry-level models for Africa but has started making inroads in south-east Asia. It released its latest flip foldable smartphone in Singapore and aims to increase its presence throughout the region.

Flip foldable smartphones fold down like traditional clamshell feature phones and unfold to become a larger smartphone. Bigger, book-style foldable phones fold down to the size of a standard smartphone and unfold to be used as a small tablet. Oppo makes both styles.

“Singapore is a key hub with significant economic and political influence over the region. It has a huge population that constantly travels. These premium phone users are key influencers in the region,” Andy Shi, Oppo’s president of Asia-Pacific, told Nikkei Asia. “We are launching here to leverage this advantage to further grow in the market.”

Shi said his company was forecasting mild growth in the Asia-Pacific region for next year despite macroeconomic uncertainties.

Zhou added that the smartphone industry was finally on the path to recovery for 2024 and 2025, and foldable smartphones would be key to that growth.

“Even though the unit shipment is not that high, foldable smartphones are growing more than 100 per cent every year. The average selling price is much higher than ordinary smartphones. That creates a lot of value, and that’s why we are all-in on foldable phones for the overseas market,” he said.

For a previous Oppo flip foldable phone launched in the Asia-Pacific market, 30 per cent of buyers were previously Samsung users and 30 per cent Apple users, the company said, citing its own sales data.

Oppo has long ranked as the third-biggest smartphone maker in Singapore, where it holds a 16 per cent market share. Samsung and Apple together have a 71 per cent market share, according to IDC. Oppo has thrived elsewhere in south-east Asia, being one of the top smartphone makers in Indonesia, Thailand, Malaysia and Vietnam, Canalys data showed.

The company also makes some of its smartphones, including its two latest foldable models, in Indonesia. Its most important production base is in the Chinese city of Dongguan, but Shi said the company had been making a multiyear effort to diversify its supply chain and qualify for government incentives to make devices for local markets. Oppo is the top smartphone maker in Indonesia, Canalys data showed.

Global smartphone shipments are forecast to total about 1.15bn units in 2023, the lowest level in a decade and a decline of 6 per cent from the year before, according to Counterpoint Research.

Foldable smartphones of both types are the only segment expected to see healthy growth amid a global slowdown in consumer electronics demand. They could become a 100mn-unit market by 2027, up from just 18.6mn units this year, according to a forecast by Counterpoint.

Samsung has been a leader in the foldable race, while Apple has yet to unveil a folding iPhone. In south-east Asia, China’s manufacturers are hoping to woo high-end buyers from both of these brands.

“Previously, it [was] all Samsung and Apple’s race in Singapore . . . but since earlier this year, as a local resident here, I found Chinese smartphone makers such as Oppo became very active in Singapore,” Yen Ng, who works in marketing, told Nikkei. “You will find their campaigns with local key opinion leaders increase a lot . . . They are trying to attract young people.”

Will Wong, an analyst with market research specialist IDC, said south-east Asia was one of the few places where Chinese smartphone players saw a chance for growth.

“Why are they betting big on the Asean market? The economy in the European market is lukewarm because of the prolonged Ukraine war. In the Middle East, a new geopolitical battle is emerging. In China, the market is too crowded with Huawei coming back. Also, they do not have much opportunity in North America,” Wong said. “They realised south-east Asia is probably where they could bet some more resources for a better position and recovery.”

Huawei quietly launched a premium 5G smartphone, the Mate 60 Pro, and revamped a foldable phone, the Mate X5, using its own chips ahead of Apple’s iPhone 15 release. The Chinese company has told suppliers it aims to make up to 70mn smartphones next year, news that left domestic rivals concerned about their share of the Chinese market.

Emerging and developing Asia is the only region in the world that can expect more than 5 per cent economic growth in 2024, significantly outperforming the global outlook of about 3 per cent, according to the latest IMF forecast in October. The momentum is expected to continue into 2025, with 4.8 per cent growth expected for the region.

Transsion overtook Vivo as the world’s fifth-biggest smartphone maker by shipments in the April-June period and maintained its momentum in the following three months. It has built on its success in emerging markets in Africa and Latin America to become the top producer elsewhere, including in the Philippines, and among the top five in Indonesia, Canalys data showed.

“South-east Asia is a good place for companies like Oppo and Transsion to grow high-end users because Apple is not quite here to bet huge resources,” Sheng Win Chow, an analyst with Canalys, told Nikkei Asia. “The region’s economy is improving and booming. Thus, [it] could become a good spot where it is easier for Chinese phonemakers to grow their presence.”

A version of this article was first published on November 3 by Nikkei Asia. ©2023 Nikkei Inc. All rights reserved

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