Xiaomi and other China smartphone titans dominate Myanmar

YANGON/NEW YORK — A smartphone increase and reforms launched in 2013 that ended a state telephone service monopoly have led to the modernization of Myanmar, regardless of a comparatively immature digital economic system.

Since 2013, smartphone giants together with Huawei, Apple and Samsung have continued to tussle for a share of this fast-growing market. Nevertheless, Chinese language gamers have dominated, with Xiaomi, Huawei, and Oppo at the moment occupying almost 66% of the nation’s cell market, in accordance with the newest Canalys estimates for Q3 2020. Samsung holds a 14% slice.

Myanmar’s web penetration reached 41% in January 2020, with a complete of round 22 million folks on-line.

Though there are round 68 million cellphones within the nation, many are conventional cellphones slightly than internet-connected smartphones.

Samsung was the one non-Chinese language participant amongst Myanmar’s prime 5 distributors, in accordance with third-quarter shipments.

Nonetheless, “the revolution from ‘no telephone’ to ‘smartphone’ is sort of outstanding, mentioned Marc Einstein, chief analyst at Tokyo-based ICT advisory ITR Company. “That is the one nation on the earth the place, in a number of years, unexpectedly, all people has a telephone.”

With Myanmar society more and more discovering its means on-line, particularly now that the coronavirus pandemic is proscribing offline actions, Chinese language smartphone giants are concentrating on its market potential greater than ever.

Some 55% of Myanmar’s inhabitants is underneath 30, and customers are notably price-sensitive, a trait not unfamiliar to Chinese language corporations and one that may give Xiaomi, Huawei and Oppo an benefit in opposition to premium manufacturers like Apple and Samsung.

Huawei made robust inroads within the nation after 2013 and have become the top-selling model till early 2016, when Xiaomi surpassed it, in accordance with an area information report by Frontier Myanmar, citing native retailers. From 2016 by means of 2018, Xiaomi and Oppo slowly eroded Huawei’s market share. Since then, Xiaomi has been the nation’s top-seller.

When requested concerning the causes behind Huawei’s decline, Einstein cited the corporate’s strategic positioning as a premium model. “For a few years, Huawei has tried to avoid the mass market,” he mentioned. “You’ll be able to inform from a few of its newest cellphones, such because the Mate 30 and Mate 40. They’re designed to compete with Samsung and Apple. Additionally, there’s this large query about its Android system. However because the commerce struggle between China and the U.S. continues to be standing now, folks shopping for a Huawei telephone might run the danger of not gaining access to Google.” 

Whereas Huawei advised KrASIA in an e-mail interview that it’s “one of many largest smartphone distributors” within the nation, Beijing-based Xiaomi has captured a number one market share of over 31% as of October, whereas Huawei was not among the many prime 5 when it comes to items shipped.

Xiaomi has emulated Apple by putting its main stores in swanky procuring facilities in main cities like Yangon and Mandalay, but its units are priced considerably decrease than iPhones. Additionally, Xiaomi has positioned its sub model, Redmi, as one of the vital in style manufacturers within the nation.

“The worth to efficiency ratio is our most potent weapon in Myanmar,” Fuliang Bai, normal supervisor of Xiaomi Myanmar, advised KrASIA. The Redmi Notice 9 Professional, the model’s newest flagship, retails for 320,000 kyat ($244), in comparison with over 1 million kyat for numerous iPhone and different premium units.

The room for development in Myanmar’s cell market is immense, with GDP per capita anticipated to rise greater than 55% by 2022.

  © Reuters

Gross home product per capita in Myanmar in 2019 was $1,408, a lot lower than that in another Southeast Asian markets the place Xiaomi is energetic — $2,715 in Vietnam, $4,136 in Indonesia and $7,808 in Thailand, in accordance with information from the World Financial institution. The relative lack of disposable earnings in Myanmar ends in much less demand for costly units, therefore the success of Xiaomi’s Redmi merchandise. 

“I feel Xiaomi is the preferred one in contrast with different Chinese language manufacturers,” mentioned a salesman at Skywards, an area cell phone retailer positioned within the Sanchaung township of Yangon. “It’s actually low cost they usually can have a greater digicam.”

The significance of the digicam can’t be understated within the minds of Myanmar customers. With surging entry to smartphones and social media, selfies have been catching on, which makes the standard of the digicam one of the vital essential standards in shopping for a smartphone.

Whereas Xiaomi’s main place shouldn’t be underneath imminent risk, having steadily elevated its market share during the last two years, one other Chinese language participant, Oppo, thanks additionally to its funds model Realme, is gaining momentum. With 86% year-on-year development within the third quarter of this 12 months, Realme is capturing the likes of customers who’re searching for budget-friendly offers with a good digicam, with smartphones priced from 139,900 kyat on one of many nation’s hottest e-commerce web site.

The model, with a ten% slice of the market as of October, goes after the low-end phase. Phoo Moh Moh, a 23-year-old salesperson at an area cell store within the Sanchaung township of Yangon, advised KrASIA, “From my gross sales expertise, the standard of the smartphone is sweet and the digicam normally has a excessive decision.”

Whereas Myanmar’s cell market might not comprise the area’s most profitable alternatives, the room for development is immense, with GDP per capita anticipated to rise greater than 55% by 2022. Most customers reside in city areas, however the proportion of individuals residing in cities was solely 30.8% in 2019, leaving many potential customers outdoors the attain of conventional gross sales channels.

The nation is growing its infrastructure. A Common Service Fund was established in 2018 to broaden telecommunications companies to probably the most distant areas. The fund, the primary of its sort in Myanmar, will use charges collected from the market’s major telecom corporations to pay for community growth.

Whereas Chinese language smartphone giants might sit up for a 5G future of their residence market, Myanmar telcos stay targeted on bettering 4G connectivity.

“Within the coming two to 3 years, worth sensitivity will nonetheless play an enormous position in rural areas,” Einstein mentioned. “There shall be plenty of Chinese language telephones priced between $30 to $50. That is what we name the grey market telephones [phones that are sold without a bill and warranty]. Within the city sector, extra folks will go for premium manufacturers like Samsung, Huawei and Apple. Samsung shall be fairly in style within the coming years as it’s not that costly in contrast with manufacturers like Apple.”

KrASIA is a digital media platform targeted on technology-driven companies and tendencies throughout the Asia-Pacific area. KrASIA belongs to 36Kr World, of which 36Kr is a minority investor. Nikkei has a minority stake in 36Kr.