Market watchers believe it will take time for Chinese smartphone maker Oppo to dislodge market leaders Samsung, Apple and Huawei in the South African market.
The analysts were reacting to Oppo’s recent announcement that it has shipped over one million units to South Africa. Oppo made the claim as it celebrated its third anniversary in the local market.
The company is also facing stiff competition from other Chinese-based smartphone vendors, such as Vivo, Xiaomi and Huawei spin-off Honor.
Arnold Ponela, IDC senior research analyst for mobile technologies and image printing and document solutions for SA and Sub-Saharan Africa, comments that Oppo primarily concentrates on the mid-range smartphone market segment. Here it faces stiff competition from several key players, predominantly Chinese brands Vivo, Xiaomi, Honor and Huawei.
Additionally, he notes, Oppo competes with Samsung’s A range, further intensifying the rivalry in this particular market sector.
According to Statista, as of April 2023, Samsung led the mobile device market in SA, with a market share of around 48%. Apple ranked second, with a share of around 19%, closely followed by Huawei in third.
Cellucity director Christopher Henschel concurs with Ponela, saying: “All of these brands [Vivo, Xiaomi, Honor and Huawei] have very deep ranges. As such, it is very difficult for them to carve out a defined niche to dominate in.
“Oppo is focusing on the mid and premium sectors in our market, which is dominated by Samsung at present,” Henschel notes.
“Oppo has a very strong product line-up, underpinned by good technology, but with the very strong brand placements of Apple and Samsung, it will take an enormous effort to challenge for the top two places in the premium smartphone sector.”
Henschel adds Oppo is mainly targeting the mid-tier sector, with solid offerings in the R3 000 to R12 000 sector. Its flagship N2 Flip, introduced as an aspirational benchmark to highlight Oppo’s technological prowess, has done well, he notes.
“The third position in the premium market sector is fiercely contested, and while traditionally the market was dominated by Huawei, Samsung and Apple, the newer incumbents are challenging Huawei’s position.
“Within our group, we are seeing strong growth from both Oppo and Honor, and this bodes well for consumers, as there is plenty of choice in the market, and accessibility to premium technology is becoming more affordable in the mid-tier.”
Ponela believes that challenging established market leaders like Samsung, Huawei and Apple will be a formidable task for Oppo.
“Samsung maintains an unassailable lead, consistently delivering high-quality products. Huawei’s sharp focus on South Africa has yielded products tailored to this market, making them a strong contender,” he says.
“Apple, on the other hand, pursues a unique strategy by concentrating on the premium segment − a stark contrast to Oppo’s offerings in the South African market, which are relatively limited. Disrupting the positions of these giants won't be an easy feat, but it’s possible.”
Ponela adds that Oppo offers a significant selection of devices in the low-end segment. He points out this strategic approach has proven successful, with the mid-range devices gaining strong acceptance among telcos, while the low-end devices effectively serve budget-conscious consumers.
“The high smartphone penetration rate in South Africa represents a lucrative opportunity for vendors. However, the key to success lies in comprehending the diverse market needs and establishing robust partnerships with telcos.”