Labor Costs, Geopolitics, Pandemic, Chinese Mobile Phone Brands Accelerate Deployment of Overseas Production

Chinese smartphone brands such as Xiaomi, OPPO, and Vivo all have their own production lines. In recent years, these brands have accelerated their overseas deployment due to rising labor costs in China, growing geopolitical risk factors, and the spread of the COVID-19 pandemic. Not only will Xiaomi produce mobile phones in Vietnam, but the company will also continue to expand production lines in India and Indonesia in the coming years. OPPO has also set up factories in countries including India, Indonesia, and Turkey to meet the needs of neighboring markets. Vivo has successively set up factories in India, Bangladesh, and Indonesia, and initiated its production lines in Turkey and Pakistan in 2021. Since current trends have the Chinese market declining more than the global market, OPPO and Vivo’s proportion of overseas production capacity is expected to increase gradually. As for Xiaomi, which has always been active in overseas markets, the company will continue to expand its production capacity in India and Vietnam.

Xiaomi’s achievements in expanding overseas markets are most outstanding, OPPO following suit, Vivo rushing to catch up

From the perspective of Chinese brands, Xiaomi has been deeply involved in overseas markets for many years. Its overseas revenue was only RMB9.1 billion in 2016, but by 2018, overseas revenue had exceeded RMB70 billion. Xiaomi currently has a market share varying between 10 and 25% in Europe, India, Indonesia, Vietnam, and the Philippines. On the other hand, OPPO has been tackling overseas markets aggressively since 2018, and currently has a market share between 10-15% in India, Pakistan, Indonesia, Vietnam, and the Philippines. As for Vivo’s late start, its market share in India, Pakistan, and the Philippines is approximately 10-15%.

If the overall market is divided into the Chinese market and the non-Chinese market, shipments from Xiaomi, OPPO, and Vivo to the non-Chinese market are estimated to account for 74%, 66%, and 46% of total shipments, respectively, in 2021. Since China’s smartphone shipments may decrease by 16% in 2022, and recovery is limited in the short term, Xiaomi, OPPO, and Vivo are expected to focus more on overseas markets in the future and the proportion of non-Chinese market shipments is expected to increase further.

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