China's e-commerce mobile phone market has seen continuous growth for six consecutive months, with a 2% Y/Y increase in 2023
According to monitoring data from Sandalwood on China's e-commerce market, in 2023, the sales volume of smartphones in China's e-commerce market reached 94.79 million units, a y/y increase of 2%, and the sales revenue reached 367.4 billion RMB, a y/y increase of 15%. Looking at monthly data, since July, the sales volume of mobile phones in the e-commerce market has continued to grow positively for six consecutive months. The mobile phone e-commerce market entered a positive cycle in the second half of the year, benefiting from the recovery of the macro consumer environment and the continued increase in online penetration. On the other hand, Chinese manufacturers such as OnePlus and Huawei have taken proactive measures in product supply, and the launch of new products has effectively promoted market vitality. At the same time, the market pace has accelerated, and product releases have been brought forward, providing strong momentum for year-end sales.
The macro consumer environment has returned to normal, and online shopping penetration is steadily increasing.
According to data from the National Bureau of Statistics, in 2023, China's total retail sales of consumer goods reached 47.1495 trillion yuan, a y/y growth of 7.2%. Among them, online retail sales amounted to 15.4264 trillion yuan, a y/y growth of 11.0%. In particular, the online retail sales of physical goods reached 13.0174 trillion yuan, showing an 8.4% increase and accounting for 27.7% of the total retail sales of consumer goods. This trend indicates that the penetration of online shopping is steadily increasing, and the potential of the e-commerce market is increasing.
The foldable screen smartphone market continues to experience robust growth, with potential in both horizontal and vertical folding products. Vertical folding products still have room for growth.
In 2023, within the e-commerce market, the sales of traditional flat-screen smartphones increased by 1% y/y, while foldable screen smartphones saw a remarkable growth of 104%. Among them, vertical folding products experienced a y/y growth of 115%, and horizontal folding products grew by 97%. The foldable screen smartphone market continues to expand, with November marking the first time that horizontal folding product e-commerce sales exceeded 100,000 units, reaching a new high. However, vertical folding product monthly sales were around 50,000 units, indicating some market bottlenecks. The competition in the vertical folding market is not yet sufficient, and the supply needs to be further strengthened. At the same time, there is still room for further price reductions in vertical foldable smartphones.
HarmonyOS smartphones continue to experience positive growth, Android smartphones show a return to growth, and iOS sales decrease while prices rise.
In 2023, sales of HarmonyOS system smartphones saw a 37% y/y increase, showing a sustained upward trend. iOS product sales remained stable overall, but in the latter half of the year, due to competition from HarmonyOS and Android products, there was a slight decline. Android smartphones experienced a small overall decrease for the entire year, but in the latter half of the year, they have returned to positive growth. It's worth noting that iOS products have seen improvements in both price and product positioning, effectively addressing the challenge of declining sales demand.
Manufacturers take proactive steps, leading to significant growth in the mid-to-high-end e-commerce market.
In the e-commerce market of 2023, the OnePlus brand successfully entered the mid-range market, while Huawei introduced new products that further repositioned itself in the high-end market. These two major brands played a significant role in driving market growth and competition. Throughout the year, the market segments within the price ranges of 2500-3500 yuan, 4000-5000 yuan, and 7000-20000 yuan all experienced growth. Apple (iPhone 15 Pro series) and Huawei (Mate60 series) contributed to the growth of the ultra-high-end market, Xiaomi (Xiaomi 13/14 series) significantly boosted the growth of the high-end market in the 4000 yuan price range, while OnePlus (Ace series) and Honor (Digital series) products greatly enhanced the mid-range market.
Major brands concentrate on breaking through key segments, driving overall growth.
In 2023, Xiaomi significantly strengthened its presence in both mid-range and high-end segments, while Apple experienced significant growth in the ultra-high-end market. Honor made strides in the 3000-4000 yuan price range, Huawei strengthened its position in both the high-end and low-end markets, with further opportunities for growth in the mid-range market. Realme made progress in the 3000-4000 yuan price range, OnePlus expanded comprehensively in the 2000-4000 yuan price range, IQOO maintained a balanced approach across the board, vivo and OPPO improved their positions significantly in the 4000 yuan and above price range, and Samsung's market share notably increased in the 6000-8000 yuan price range.
Market competition is intensifying, with new product supply effectively driving market growth.
In 2023, Android manufacturers continued to accelerate their market pace. Looking at the product lifecycle, products that were newly launched within 1-3 months saw a significant increase in sales share, indicating the impact of new products on the market. Both the frequency of new product launches and the market's response to new products are accelerating.
Of particular note is the transition of HarmonyOS system smartphones from a long-term product iteration cycle to a rhythm where multiple products are launched simultaneously, entering a more mature growth stage. Specifically, the sales share of HarmonyOS system smartphones in the 1-3 months, 4-6 months, and 7-9 months categories all saw increases, indicating that there is effective demand for HarmonyOS smartphones in the market.
Foldable screen smartphones and mid-to-high-end Android smartphones are still in the stage where new products drive the market. In the foldable screen smartphone domain, products that have been on the market for 1-3 months account for over 50% of sales share, and at times even close to 70%, indicating a heavy reliance on new products to drive the market. Meanwhile, Android smartphones in the 4000 yuan and above price range have established a stable iteration rhythm of about 6 months, with products in the 1-3 months category accounting for 50% of sales share and 4-6 months new products at 30%. In the 2000 to 4000 yuan price range, driven by OnePlus and other manufacturers, there has been a renewed emphasis on launching new products and pricing policies, bringing this market segment back into the growth stage driven by new products. These trends collectively serve as effective drivers for the continued growth of the market.
Dual Growth in Demand for Ultimate Configurations and Balanced Products
In 2023, products with extreme configurations showed significant growth momentum. Specifically, smartphones with features such as a screen refresh rate of 120Hz or higher, a camera with 50 million pixels or more, 16GB or more of RAM, 512GB or more of storage capacity, and a battery capacity of 5500mAh or more maintained high growth rates. This reflects consumers' increasing desire for higher performance and stronger functionality. Under the demands for extreme configurations and mobile productivity, features like a screen size of 6.7"+, a weight of 220g+, and a thickness of 8.7m+ have all seen rapid growth.
On the other hand, in the segment of devices with limited configurations, balanced products have also maintained high growth rates. In terms of screen size, devices with screen sizes ranging from 6.3 to 6.4 inches, a weight of 170g, and a thickness of 7.8 to 7.9mm have also seen rapid growth. The rapid growth of balanced configuration products reveals the presence of a consumer segment that places a high value on portability and comfortable grip. As products continuously evolve and configurations improve, consumers' fundamental needs for products remain unchanged. Successfully understanding and meeting these unchanging needs is a key factor for manufacturers to gain an advantage in the competitive market.
The competition intensity among the six major smartphone brands has reached an unprecedented level, promoting the capability to cope with the competition.
The competition intensity among the six major smartphone brands has reached an unprecedented level. Compared to the overall market structure, there is still significant room for competition between these brands. In this highly competitive environment, pricing strategies have become a direct manifestation of competition. Recent market trends show that brands like Apple, Samsung, and Huawei are significantly increasing their average selling prices, indicating their strong positions in the high-end market.
At the same time, brands like Vivo, Xiaomi, Realme, and OPPO are steadily raising their average selling prices, indicating that while maintaining market share, they are also gradually improving the value positioning of their products. On the other hand, OnePlus has seen a slight decrease in its average selling price as it implements a strategy of expanding its product lineup to cater to a wider audience. IQOO and Honor brands have maintained a stable competitive position with a steady average selling price amid fierce competition.
Looking at the long term, enhancing brand value is crucial for participating in price competition and effectively responding to market fluctuations. Only by continuously improving brand value can manufacturers maintain a competitive advantage in short-term price competition and ensure stable long-term development in the market.
The competition landscape in the high-end smartphone market is transforming, setting the tone for the future overall market dynamics.
In the 4Q of 2023, the competition landscape in the high-end smartphone market shifted, laying the groundwork for future market trends. Currently, different price ranges exhibit corresponding competitive patterns. In the 4000 to 5000 yuan price range, Android smartphone brands have taken the lead, primarily with standard versions of their products. In the 5000 to 6000 yuan range, the Android flagship Pro series has achieved significant market success. In the higher price segments, specifically the 6000 to 8000 yuan range, Apple continues to dominate, while HarmonyOS system smartphones have gained a relative market advantage, reflecting consumers' growing recognition of the unique features and ecosystem of the HarmonyOS system. In the 8000 to 10000 yuan high-end market, Apple's brand influence and flagship product lines remain the primary factors influencing consumer choices. In the price range above 10000 yuan, the relative advantages of HarmonyOS system smartphones become even more pronounced.
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