Growing the high-tech Chinese presence in Southeast Asia

Models demonstrate mobile products of ZTE Corp at a press conference in Bangkok. Chinese mobile brands sold across Southeast Asian countries are still considered low-end products. [Photo/Xinhua]

Chinese smartphone makers are still having to work hard at growing brand awareness in Southeast Asia, despite the huge strides having been made by the country's top producers elsewhere in the world.

According to a report released by The GfK Group, Germany's largest market research institute, nearly 120 million smartphones were sold across seven major Southeast Asian countries between September 2013 and August 2014, a 44 percent increase in volume compared with the same period a year ago.

The study also revealed there are a staggering 345 different Chinese-branded smartphones jostling for sales in the region, with strong sales particularly in Indonesia, Malaysia, and Vietnam, where their respective proportions of consumer spend have reached more than 10 percent of the total market.

But according to Rujipun Assarut, a senior researcher with the Kasikorn Research Center in Bangkok, despite those numbers, Chinese mobile brands sold across the region are still considered "low-end products, especially in the most competitive markets such as Thailand".

"If Chinese brands want to explore further potential in the market, how to improve their image is crucial," said Assarut.

Gerard Tan, account director for Digital World at GfK Asia, explained that the region's most-developing countries remain dominant when it comes to smartphone sales, with its lesser markets still years behind in terms of sophisticated product offerings, adding "many outside the biggest cities are probably just making the switch from their basic feature phone and acquiring their first smartphone".

According to Rujipun, the leading Chinese smartphone manufacturer in Thailand was Oppo, with just a 3 percent market share in 2014.

"Oppo has quite an international name, from which it is hard to tell that it has a Chinese background; the company also hires South Korean and Western celebrities to endorse their products, so their smartphones are actually seen by many as a South Korean brand," he said.

Rujipun said a product's distribution channels, its offline promotional events and after-sale services are crucial for local brand success.

"A strong brand should also have its own flagship stores," Rujipun said.

Some Chinese companies, however, have already been working hard at improving their image across the region.

Huawei Technologies Ltd, considered the world's biggest maker of telecommunications equipment, for instance, had a $100-million, regional brand-awareness budget for last year with $20 million alone in the all-important Thai market.

In order to make its products more accessible, Huawei plans to expand the network of retail outlets selling its phones from 15,000 to 25,000 by the end of this year, which would account for nearly a quarter of all mobile phone shops in Southeast Asia.

The company enjoyed significant sales growth last year with Southeast Asian shipments soaring 200 percent－impressive given it only started selling its phones in the market at the beginning of 2013.

Its advertising and promotions are seemingly everywhere, from Bangkok's International Suvarnabhumi Airport to train carriages, main streets and shopping malls throughout the capital.

"Our latest premium smartphone has become so popular in Southeast Asian countries with local shops often running out of stock," insisted Xu Linfeng, director of Huawei's device marketing department in Southeast Asia.

The phone model referred to is Huawei's Ascend Mate 7. Using Thailand as a regional launch pad, the company debuted the new device at 16,900 Thai baht ($528) in Bangkok at the end of October, just a month after its first introduction to the world.

Many of the device's features, such as a six-inch, full-definition screen, 13MP rear-facing camera and the option for 3G and 4G networks, can help local users gain better access to social media, it claims, a crucial function for Southeast Asian users.

In downtown Bangkok, Uthane Samranrum runs a Jaymart store－one of the biggest electronic devices retailers in Thailand－in Siam Paragon, the city's most popular shopping mall.

Samranrum greets his customers at the entrance, beside a Huawei counter featuring its latest mobile phones.

"The design and quality of Huawei's smartphones can compete with Samsung, while the prices are much more affordable. I've been seeing a sharp increase in customer recognition of Huawei's mobiles," he said, "so I moved the Huawei counter to the very front of my shop. It is a key brand to attract more people."

He currently sells around 20 Huawei smartphones a day, nearly half the shop's daily total.

One customer, Javer Ros Frasa, has just bought a Huawei Ascend G6 for his father.

"I bought a Xiaomi smartphone in Hong Kong, and I liked it a lot. Some Chinese smartphones are good quality and reasonably priced," Frasa said.

Huawei expects to open its first flagship store in central Bangkok early in February, in the same luxury shopping mall as Samranrum's Jaymart.

In anticipation, the company's marketing team has been working flat out, arranging countless different promotional events, including a bloggers' nights, in an effort to attract local users, and create a new generation of fans.

After already claiming to have attracted more than 120 million Southeast Asian-registered followers on its official interactive customer website, it appears the Chinese smartphone giant is well on the way to making its mark across the rest of the region.