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Local mobile brands wrestle for market share

For the longest time, a lot of the local brands have made a killing in the phone market in the Philippines. At one time, 3 out of the top 5 mobile brands came from local Pinoy brands (in terms of units sold).

Local mobile brands thrived and succeeded because they offer much cheaper handsets than the global counterparts and since Filipinos are very price-sensitive, the ones who offer the best price for a reasonably good device gets the consumers attention and their wallet.

Locally-branded smartphones were so popular that many other smaller local players got into the same business as well. Most of them would just outsource everything from their suppliers in China (normally referred to as ODM or original device manufacturers). There are a lot of them suppliers in Shenzhen offer already finished devices and just add your own brand or logo into them.

But I digress.

In the last couple of years, a lot of global and regional brands have entered the Philippines knowing really well the potential of the market.

The likes of Asus, OPPO, Motorola, and Vivo are just some of the bigger examples. Newer entrants also include Xiaomi, Gionee, and Meizu with the most recent ones are Nokia by HMD and HTC.

Almost all of them offered equally good and competitively priced units in the Php15,000 range and the sub-Php10,000 price points, a category which the local brands dominated for the longest time. For now, these Filipino brands continue to command a bigger share in the sub-Php5,000 price point but that category has very low margins, despite being a volume driver. Of course, there’s the sub-Php1,000 feature phones as well.

This inevitably increased the number of handset choices for the consumers for each price point. And to be noticed the brands need to put a lot of marketing money on the table. The ones with the bigger budgets get the advantage.

The regional and global brands are also more recognizable compared to the local names, along with it is the level of trust and confidence a lot of consumers consider when they spend for a new product purchase.

The individual market share has spread out across a dozen brand names, margins grew thin as competition grew stronger. What used to be a simple, lucrative business for a few players have become very diverse, challenging and constantly problematic game for many.

Customer support, distribution, marketing, channel support, inventory management and many others became a more serious concern. A strong competitive environment can really bring the best (or worst) out of each player and this is what is happening in the local landscape now.

We’ve already seen the signs. A few players have backed out of the market, not of their own volition but because of natural selection. The remaining players — the ones with a tighter ship, has good product selection and position as well as a responsive strategy — will come out as the big winners. And that is good for us consumers.

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Avatar for Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

4 Responses

  1. Avatar for EGGO EGGO says:

    Agree ako jan. pumapasok nrin tlga ang mga well known brand like xiaomi and meizu which is very competitive in terms of specs. to price. Idagdag mo pa jan ang good service support. Sa ngaun nga mukhang pahirapan na ang mga local brand makipagsabayan lalo na sa 7K price point pataas. one example is the redmi 4a, 4x and note 4x offerings of xiaomi compared to our local brands. if you will make comparison to the offerings of our local brands in the same price range walang wla.. mula sa hardware to software to built quality implementation. may 5 to 10 years from now local branded phone will be dead.

    • Avatar for kyle kyle says:

      kahit hindi sa xiaomi talo na ang local brands. para sakin nagpasimula jan ang huawei GR3 2017..san ka makakakita ng matino na HINDI entry level device, sa isang well known brand, na below 10k? nung lumabas un nawalan na ng sense na bumili pa ng cherry mobile na worth 7k pataas.

      dagdag mu pa ung kalat kalat na service centers ng huawei, wala talaga patama ang cherry.

      as for the other brands, pansin niyo wala na sa kanila ang nagbebenta ng above 6k na phones. alam

  2. Avatar for 123456 123456 says:

    Sir, this article would be more helpful if you can provide figures of these local brands’ market shares.

  3. Avatar for el gato el gato says:

    “Customer support, distribution, marketing, channel support, inventory management and many others became a more serious concern. A strong competitive environment can really bring the best (or worst) out of each player and this is what is happening in the local landscape now.”
    i agree with this statement.

    sana mag-release ang BIR at BOC kung sino sa mga local brands ang nagbabayad ng mas malaking taxes at legal import fees.
    sana mag-release na rin ang DENR kung may brand ba na madaling masira at itinapon na lang sa recycle site vs dump sites ang mga sirang units.

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