Understanding China’s Growing Mobile Market

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How does the world’s most populous country surf the Internet? In China’s growing mobile market, 467 million users now use their mobile devices to search the web, with no less than 37.2 percent of them using mobile apps to do so. The trend is in line with recent developments in the U.S., where 2014 became the first year in which mobile internet usage outpaced desktop usage.

A Different Way of Doing Things

Still, the Chinese market is significantly different from the US market. Above all, the fight between iPhone and Android seems unimportant to Chinese users — local corporations, led by rapidly rising market leader Xiaomi, are dominating the field. Just by becoming a major player in the industry within the past year, Xiaomi has ascended to market dominance with high-performance, low-cost phones.

How did Xiaomi dominate the market? Instead of charging premium prices for its phones, the company sells devices for nearly the same amount as its production costs. By keeping the same models on the market for over a year, the company ensures lower material costs at the end of the product cycle, which in turn generates a profit at that stage. But most of the company’s money is made via apps developed for a customized version of the Android operating system, exclusive to its devices, which is updated every week.

Lessons from a Waking Giant

China’s smartphone market offers valuable lessons for merchants interested in recommerce. Customers in this budding smartphone market are expecting quality products for a low price. That, in turn, offers a window for resold iPhones and Androids, which still perform but don’t offer the same value as their newer versions. In addition, China’s growing mobile market offers insight into a world not dominated by brands such as Apple and Google. It’s a market where performance and price matter over brand loyalty. That’s a gold mine for businesses with innovative recommerce programs, as customers will be more willing to part with their old cell phones in exchange for newer versions. Contact us to see where your recommerce opportunities lie!

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Justin Finkelstein

Co-Founder & CTO at Sourcely; server swiss army knife; flavor architect; the wildcard.