Mobile Phone Market In Southeast Asia: Weak Rebound Caused By Epidemic Situation

The new coronapneumonia variant virus with stronger transmission power is continuously influencing the global hardware industry chain.

Liu Yan, a mobile phone channel provider, has been paying attention to and laying out the Vietnamese market since 2019. However, due to the epidemic situation, he has not really started the local business operation.

"It was originally planned to open up business in Vietnam this year, but I have already put it off completely." He told 21st century business reporter that he would prefer to be more prudent when the uncertainty is still strong. He had already figured out the local policy and sorted out the local relations before, and also determined the partner in Vietnam. The preliminary work has basically been raised, and he just needs to "open" the action“ Of course, I will keep a close eye on the Vietnamese market and will start immediately when the time comes. "

Liu Yan is actually a miniature of mobile phone industry chain manufacturers. In recent years, with more and more mobile phone manufacturers moving to Vietnam, it is gradually becoming one of the most important manufacturing regions in the world, especially Samsung has many mobile phones produced here. More than that, oppo, vivo and other manufacturers are also increasing their investment in the local market, and have won the top sales position in some Southeast Asian countries in recent years.

However, the rapidly spreading epidemic situation and the temporary but huge blockade measures implemented by some countries are undoubtedly affecting a series of local operation and future plans of the mobile phone industry chain. However, the acceptance of online channels by Southeast Asian countries is not as good as that of India.

Under the greater uncertainty, whether the corresponding product series and channel rhythm can be quickly and timely prepared will be a sustainable proposition for the mobile phone industry.

Southeast Asia market is an important gathering place for many large domestic terminal factories. Visual China

12% of mobile phones in the world are made in Vietnam

The accumulation of mobile phone manufacturing capacity in Vietnam has a similar background with the rise of India.

Liu Yan told reporters that compared with India, Vietnam even has a relatively good business environment. In India, there may be situations where different sectors need to be dealt with, but in Vietnam, the joint will be relatively simple, which means that business can be promoted more quickly in the latter.

In addition, there are more favorable tax policies and labor costs. Liu Yan points out that the labor expenditure on the channel side of his company is actually comparable to that in India.

"It's very important for me to lay out Vietnam as a springboard for my business to go to Europe and America better." He stressed to reporters that at present, India's tariff is increasing, but if it exports from Vietnam to Europe and the United States, it will enjoy a higher proportion of tax exemption policy.

For the majority of mobile phone industry chain practitioners, the deployment of Vietnam also has the drive of industrial ecology.

In recent years, after Samsung's factory deployment in China has gradually withdrawn, it has focused on Vietnam. Apple also intends to place some industrial chains in the local area, thus creating the attraction of Vietnam at the industrial level.

Tarun pathak, director of mobile devices and ecosystem research at counterpoint, told 21st century business reporter that today, the electronic market is playing an important role in Vietnam, especially its mobile phone manufacturing industry“ According to our statistics, Vietnam contributes nearly 12% of the world's mobile phone production, and its manufacturing position is second only to China and India. "

Among them, Samsung's performance is the most obvious. Tarun pathak added that as 72% of Vietnam's total mobile phone exports come from Samsung, the epidemic may have an impact on mobile phone shipments, of which Samsung will be relatively affected“ However, the number of these cases is likely to decline, as much has been done to contain the virus and restrictive measures taken earlier. The overall impact of the epidemic will be short-term, which may lead to production capacity below average in a few weeks. "

Another industry chain observer told the 21st century economic report that Samsung does account for about 60% of Vietnam's total in terms of mobile phone hardware assembly. Foxconn and local manufacturers are also the main assembly plants. Foxconn mainly works for Google in the near future. However, due to the small volume required by Google, other manufacturers are less affected by the epidemic.

"We do hear that there have been confirmed cases in Samsung's relevant supply chain in recent years, but the problem has been solved quickly, and it has returned to work normally in June." The celebrity continued that in the apple ecological chain, the proportion of IOT OEM manufacturers should be higher than that of smart machines. Currently, Foxconn has not made relevant intelligent machine products for apple in Vietnam.

Gao Hongxiang, IDC's global hardware assembly research manager, told reporters that China still contributed nearly 70% of its global assembly share. In addition, Vietnam and India accounted for about 10% of the total. The remaining small share also came from some other countries.

"Mobile phone assembly can be roughly divided into front-end assembly that requires high-precision machinery and equipment and technical staff, and back-end assembly that requires more labor. At present, Vietnam and India will undertake the assembly of the back-end assembly. Overall, the trend of mobile phone assembly ecological migration will be relatively slow. " Gao Hongxiang further analyzed to the 21st century economic reporter that the reason is that the ecology of mobile phone supply chain is relatively complete in China, and the proportion of Chinese manufacturers is relatively high. In addition, the assembly process of smart phones is relatively complex, and the requirements for technology and equipment are relatively high, so it is not so easy to be digested by other countries.

Online promotion is accelerating

In terms of production and manufacturing, the impact on domestic core manufacturers may be small, but the Southeast Asian market is still an important gathering place for many domestic leading terminal manufacturers. Especially in recent years, oppo and vivo have broken through Samsung's encirclement and suppression and won the sales champion status of some countries in turn.

To some extent, this is related to the similar consumption habits of these countries. Some insiders of mobile phone companies have told reporters that the markets in Southeast Asia are different from those in India. The e-commerce channels in India have grown gradually in recent years, but the e-commerce in Southeast Asia is just beginning. It can be imagined that the blockade measures will more or less bring short-term impact to these large factories.

Tarun pathak told reporters that the blockade could affect smartphone sales in some key Southeast Asian markets in the second quarter“ Compared with the normal sales period before the outbreak in the second quarter of 2019, we expect a 5% decline in Q2 this year. However, at the same time, the sales of online channels will also increase year on year. In the past few years, the proportion of online channels was only 10%, but now it has contributed 16%. We predict that the proportion will reach 18% on the bottom line by 2021. "

He further pointed out that mainstream Chinese brands such as oppo and vivo have been expanding in Southeast Asia in recent years, and are competing for the first place in the Philippines, Malaysia, Indonesia and Thailand“ On average, about a fifth of their sales come from these countries, while oppo and vivo have a larger share of offline market segments in these countries. Therefore, if the epidemic strikes these countries over a longer period of time, the global market share of these brands may be affected by 1% - 2%

Wu Yiwen, senior analyst of strategy analysis, told reporters that at present, the impact of Southeast Asian epidemic on ov is limited, because the increment of these two large factories this year mainly comes from China and Western Europe markets.

"We believe that the recurrence of the epidemic will lead to a weak rebound in the Southeast Asian smartphone market this year. The epidemic has negatively affected the local residents' expectations of disposable income and the efficiency of enterprise production and logistics. " She told the 21st century economic reporter that with the blockade and passive changes in shopping habits, the effectiveness of offline marketing activities will be reduced“ In this context, we see that terminal manufacturers have accelerated the investment in the online mobile phone market, and combined with the local situation to increase the promotion efforts. For example, oppo has increased its online promotion of Ramadan in the Indonesian market. "

In the long run, unlike the domestic market already in the Red Sea, Southeast Asia's smart machine market still has much room for development, and the interviewees are optimistic.

Tarun pathak pointed out that the Southeast Asian market is still resilient“ We may still see 8% annual growth in these markets as a whole, especially with a relatively low sales base affected by the epidemic in 2020. " He believes that with the increasing demand for online learning and games during the epidemic period, the use rate of smart phones is rising, and the resulting equipment wear is expected to support the continued strong replacement cycle in these countries.

Wu Yiwen also said that there is always a demand for smart phones in these countries. Of course, the epidemic has greatly increased the volatility of demand, and economic uncertainty has led to consumption degradation“ But from an optimistic point of view, the epidemic will accelerate the development of the online smart phone market in Southeast Asia, which is more conducive to brands such as Xiaomi and realme, which are good at entry-level smart phones online. "

(Liu Yan is not his real name)