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In 1Q24, the Chinese e-commerce smartphone market saw a Y/Y increase of 4.7% in sales volume and 3.2% in revenue, maintaining steady growth. With manufacturers’ proactive strategy, both the over 6,000 RMB and under 4,000 RMB price range showed growth; foldable smartphones broke through 100,000 units in monthly sales, becoming a key component of the high-end market and continued to grow through steady iterations. During 1Q24, Senior executives from e-commerce platforms, smartphone manufacturers, and automobile companies have strengthened their layouts in live broadcasting and video marketing, with live-streaming e-commerce continuously achieving triple-digit growth; Android and HarmonyOS products accelerated their lifecycle iterations, showing explosive growth in the short term and sustained vitality in the long term.

The steady growth of China's e-commerce smartphone market

According to Sandalwood China e-commerce data, in 1Q24, the sales volume of smartphones in the Chinese e-commerce market was 23.55 million units, a Y/Y increase of 4.7%; the sales revenue was 86.4 billion RMB, up 3.2% Y/Y; the overall China e-commerce smartphone market showed a steady growth trend.

The market is growing on two fronts, with room for further momentum in the mid-range supply.

Looking at the average price of products, the average price of smartphones is 3,666 RMB, a Y/Y decrease of 1.5%. Breaking down by price range, in 1Q24, the market share of the below 4,000 RMB price segment increased from 62% in the same period last year to 67%, approaching the level of 2021-2022; the market share of the 4,000-6,000 RMB price range decreased from 18% to 11%; the share of the above 6,000 RMB price range increased from 20% to 22%, especially the share of the above 10,000 RMB price range significantly increased.

The concentration of top brands in the Chinese e-commerce market has reached a very high level. Changes in the price segment reflect the direction of manufacturers' product strategies. On one hand, the upward shift in Apple's product line and the continuous growth of Huawei HarmonyOS and Android foldable smartphones have driven the expansion of the above 6,000 RMB high-end price segment. At the same time, there is currently a periodic market opportunity in the 4,000-6,000 RMB price range.

On the other hand, since the first quarter of last year, the supply of mid-range Android products has been strengthened, and by the first quarter of this year, thousand-RMB products began offering core configurations close to flagship models, significantly promoting the growth of the mid-to-low price product lines.

Foldable smartphones are experiencing steady and certain growth, becoming an important part of the high-end market.

According to Sandalwood's monitoring data for the Chinese e-commerce market, in 1Q24, sales of foldable smartphones in the e-commerce market reached 320,000 units, with a stable monthly average of over 100,000 units, representing a Y/Y increase of 33%.

Both the sales volume and average price of foldable smartphones are on an upward trend. Specifically, the average selling price of horizontal foldable smartphones reached 11,000 RMB, with the main sales concentrated in the above 10,000 RMB range. Vertical foldable smartphones have an average selling price exceeding 7,000 RMB, with the primary sales range between 5,000 to 8,000 RMB.

In terms of market penetration by price range, foldable smartphones account for 17% of the market above 10,000 RMB, and 5% of the market above 6,000 RMB. As consumer awareness of foldable smartphones significantly increases, these devices are entering a stage of steady growth and are gradually becoming an important component of the high-end market.

Live e-commerce continues to show significant growth and become a strategic marketing channel.

From the perspective of e-commerce formats, the sales volume of mobile phone categories via Live streaming increased by 121% Y/Y in the first quarter, while shelf e-commerce remained stable with a 3% increase. Social e-commerce and vertical e-commerce, on the other hand, saw declines of 8% and 16%, respectively.

Live streaming has become an effective way for manufacturers and platforms to reach users. This format not only promotes immediate sales of products but also effectively enhances user engagement and the immediacy of purchasing decisions.

In the first quarter, executives from e-commerce platforms, mobile phones, automobiles, and other end manufacturers strengthened their layouts in live streaming and video marketing. Live e-commerce has gradually become a basic configuration for omnichannel e-commerce, especially during new product launches, positively impacting the overall popularity and efficiency of traffic.

The lifecycle of Android and HarmonyOS products is accelerating iteration, testing their explosive potential and sustained vitality.

With Huawei's continuous recovery in product strength, HarmonyOS smartphones have shifted from relying on extended lifecycles to actively iterating with new products. Simultaneously, the product lifecycle iteration of the entire Android smartphone market is also accelerating.

According to Sandalwood's monitoring data of the Chinese e-commerce market, starting from 1Q23, the proportion of Android smartphones within 1-3 months of release has continuously increased, reaching a peak of 30%. The share of products 4-6 months after release fluctuates but remains around 25%; the share of products 7-12 months after release shows a gradual decline. The share of products over 12 months remains at approximately 20%. This trend indicates that the Android product lifecycle is accelerating, and the initial sales phase (1-3 months) after a new product launch is becoming increasingly crucial.

This trend highlights the high expectations and pressures of the market for new products. Newly released products need to possess strong market appeal and explosive potential or have enough enduring vitality to span over years. Manufacturers need to make corresponding adjustments in research and development as well as marketing strategies to cope with the accelerated iteration of product lifecycles and consumers' pursuit of new technologies and experiences.

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