A market with plenty of opportunities
According to a survey conducted by Flurry Analytics, a quarter of worlwide telecommunication devices as smartphones and tablets have been bought in China. Furthermore, a third of Chinese mobile owners are smartphone users. Thus markets of smartphones and tablets in China are already extremely matured. Multimedia companies fully used the current momentum of Chinese economy and the growth of the China’s standard of living.
Even if some brands as Apple and Samsung significantly took advantage on their popularity, their positive image and their financial power to dominate the market, there are still plenty of opportunities for newcomers.
Indeed, 50% of the market is grabbed by competitors of Apple and Samsung and China based manufacturers are getting more and more popular. This has been made possible by the quality and the reliability of products launched by these brands. Famous examples are the popularity of smartphone manufacturers as Xiaomi or Huawei. In the tablet market, My Simax is also a brand which experiences a growing success by offering quality products with moderate pricing strategy.
Which strategy to adopt: the example of My Simax
The strategy of the majority of Chinese brands is quite simple. To compete with the market leaders, they take advantage of the very low cost of production in China and come up with an aggressive pricing strategy. Indeed, when it comes to tablets PC, the first purchase criteria of Chinese consumers is to get the best value for money. But most of time these brands offer a product quality which does not meet the consumer’s expectation. Chinese standard of living has increased significantly and consumers are no longer satisfied with low-quality product. Thus the key to compete against Apple or Samsung is to offer same value but lower price. But without the same power of production than these two giants, it does not appear to be realistic.
Launched in 2009 by French investor JX Paulin, Simax did not follow the trendy low-cost strategy and focus on the design of a high-quality product, which can compete with the market leader in term of value. It did not reduce the production cost at all, following the market leaders policy and controlling the quality every step of the way. It enabled the brand to design and build some of the most reliable products on the market.
Beside this quality-driven approach, My Simax also focus on offering competitive price. This pricing policy is enabled by the choice of a poor communication and distribution strategy. Indeed, My Simax does not invest in any communication channel and expects to develop its popularity and brand awareness by word-of-mouth and social networks. Moreover, its products are only available on its official website and the company does not have any distribution cost.
Therefore the awareness of the brand is not as high as other Chinese new comers. But its image is really positive, the conversion rate is quite high and the customer satisfaction enables a strong repeat purchase rate. The brand slowly builds a strong community of brand lovers. Among this community, every new product launch is an event as the manufacturer always offers to its customer innovation and design quality.
This example shows that, even if Chinese brands which develop a low price strategy can compete with market leaders in a short term perspective, their low-quality products do not enable them to last long on this market. In another hand, manufacturers as My Simax which choose to offer high quality products and moderate price have a chance to be successful and to become a consistent competitor, despite a slower development.