China’s TCL owned Alcatel One Touch became the number one mobile phone supplier in Russia during Q4 2015 while India’s Micromax also jumped, entering the top three position among brands in Russia.
According to the latest research from Counterpoint’s Market Monitor program, in Q4 2015 (Oct-Dec), Russia’s mobile phone market grew by 8 per cent annually. The growth in the market resulted in significant shifts in the competitive environment during the quarter.
“Russia has over the years been a key market for mobile phone manufacturers, having a halo effect for the performing brands in other countries within the region. While, the Russian economy shrank 3.7 per cent, a sharp dip since the global crisis in 2009 and as the Ruble weakened, but the overall mobile phone demand was surprisingly good, up by 8 per cent YoY. This uptick was driven by a rise in cheaper feature phone demand during the quarter; the smartphone market was flat compared to last year. This is an interesting reverse trend which signals the demand for better and more affordable mobile devices, filling the demand gap.” says Peter Richardson, Research Director at Counterpoint Research.
“The rise in demand for affordable phones has been a blessing in disguise for Asian brands as Alcatel One Touch climbed to the number one spot, capturing 12 per cent market share and growing 60 per cent annually. The largest domestic brand in India, Micromax, also moved up the rankings to capture the third spot in Russia for the first time ever, growing more than 350 per cent annually. This is an exciting time for challenger brands such as Micromax and Alcatel OneTouch to strengthen their brands in newer markets, moving up the global rankings,” says Tarun Pathak, Senior Analyst, Counterpoint Research.
James Yan, Research Director at Counterpoint Research, highlights, “In the smartphone segment, the market remained almost flat annually, but Chinese brands such as Lenovo and ZTE jumped to the second and third spot respectively, surpassing Apple and well-established Fly Mobile during Q4 2015. For example Lenovo’s highly affordable A series (A1000 & A2010), drove the demand thanks to broader distribution reach with availability across major retailers and operators. This has helped Chinese brands such as Lenovo & ZTE grow volumes outside their domestic market as growth in the China market remained soft.”
The following are the key findings of the competitive environment in Russia during 4Q 2015:
- Russia Mobile Phone Market 4Q 2015
The Russia market registered a strong comeback in second half of 2015, but still declined for the full year due to very weak first half 2015 as the weak Ruble and other macro factors affected the overall economy.
The Russia mobile phone market grew by 8 per cent annually and 27 per cent sequentially during Q4 2015.
Smartphone shipments remained almost flat registering a 1 per cent growth annually though up a healthy 13 per cent sequentially.
The Chinese TCL-owned brand, Alcatel One Touch, became the number one mobile phone brand during the quarter, surpassing Samsung, thanks to stronger demand for its feature phones in Q4 2015.
The biggest domestic Indian brand, Micromax, which expanded its operations in Eastern Europe a couple of years ago, is now reaping the benefits of distribution and marketing as it captured the third spot for the first time ever with 9 per cent market share.
However, Samsung led the overall smartphone market during the quarter with a market share of 17 per cent, though down from 21 per cent a year ago.
Lenovo raced to the number two position, with strong demand for its entry-level portfolio, capturing 11% share, followed by ZTE which climbed to third spot.
Apple saw demand for its iPhone slow due to the weakening economy and stronger Ruble, making it quite an expensive offering. However, the Cupertino vendor still maintained its position in the top five smartphone brands in Russia in Q4 2015.
Fly Mobile, which has enjoyed success in last three years in Russia, becoming one of the most popular mobile phone brands, also lost share at the expense of the upstart Asian brands. But it still maintained its position in the top five rankings in Russia.
Russian operators such as Megafon and MTS have raced ahead in 2015 to expand their 4G LTE footprint. However, only one in four smartphones sold were LTE capable. There is consequently a lot of room for LTE shipments to grow compared to other emerging markets such as India where LTE smartphone shipment demand has skyrocketed in spite of there not being any meaningful LTE coverage.
Russia’s smartphone market has seen strong recent traction from Chinese brands, which have expanded to new geographies as their home market saturates.
Chinese brands captured close to 30 per cent of the total smartphone market during the quarter.
Close to sixty brands are competing in the market. Some of the key local brands to keep an eye on include: Dexp,BQ and Prestigio.
Source: Counterpoint Research Market Monitor Q4 2015 Report
The Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling triangulated with sell-through (sales), supply chain checks and secondary research.