Bangladesh has seen a rapid growth in mobile handset market, specially in smartphone segment, since 2013, with local brands dominating the market, while the international ones are striving to gain momentum with their aggressive marketing strategies.
At present, the country is a Tk8,500-core market of some three crore mobile handsets comprised of local and international brands vying with each other.
Of the total mobile phones, only 30% are smartphones and the rest are basic phones, which are priced below Tk2,000.
Since 2008, local mobile handset brands had the lion’s share of the market with its lost-cost and mid-range basic products.
During the period between 2008 and 2012, international brands were losing their business to local brands, Symphony and Walton, which gathered momentum with their over 50% market share. The local brands served customers with low-cost smartphones priced at between Tk3,000 and Tk6,000.
We have some limitations about skilled manpower and technology. It will take time to achieve that skill
In recent years, particularly over the last two years, most international brands made a comeback with their quality products, strong Research and Development (R&D) strategy and after-sale services.
There are hardly any districts where international brands have not opened up their showrooms to reach out their products to smartphone users.
According to the Technology Market Research Firm, Counterpoint, Huawei that entered the top five smartphone brands topped the list in Q1 of 2016 and continues to perform well in the segment, moving up into top three spots in Q3 of the same year. The growth was mainly driven by its affordable smartphones.
Samsung has slipped to become the third largest mobile phone brand in Bangladesh, still holding the second position in the fast-growing smartphone market with a 15% market share.
Indian brand LAVA that set foot in the Bangladesh market in 2013 remains strong within top five smartphone brands in the country with 8% market share presently.
Unlike LAVA, Micromax India which is struggling in its home market continues to lose its market share in Bangladesh as well, and is now out of the top 10 mobile phone brands listed in Q3 last year.
Symphony leads by a big margin in both overall mobile phone and the fast-growing smartphone sub-segment with 14% market share.
An affordable offer, effective localisation of software and services, expansive distribution and strong connection with local users drove the Symphony’s rapid. According to the phone company, currently, it holds 38% market share.
The fourth largest mobile phone player in Bangladesh, Walton, is ranked with top five in both feature as well as smartphone segments.
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Photo: Dhaka Tribune
Given the situation, Ashraful Haque, director (marketing), Symphony, said the local brand would be able to retain its market share using new strategy. Moreover, the government new tax policy on imported spare parts will be congenial to their business.
In the last budget of Fiscal Year 2016-17, the government has reduced tax over 15% on imported spare parts which would encourage local brands to assemble their mobile handsets in the country.
At present, around 30% people use smartphones. The ratio will reach 35% by the end of this year and 60% by 2020.
According to users, when it comes to quality, local brands fail to compete with the international brands, and to survive in the market situation, they got to produce quality products.
Rezwanul Hoque, CEO, Transsion Bangladesh Limited, a Chinese mobile handset company, said the main weakness of local brand is they don’t have any Research and Development, one of the most important elements in manufacturing mobile handset. Transsion invests 6% of its total revenue earnings in R&D.
He said Bangladesh has huge potential in mobile handset market. To meet only 30% demand, some 82 lakh smartphones were imported in the last one year. If the ratio of smartphone use rises nearly 70%, the market would be increased more than twice.
Counterpoint Senior Analyst SuJeong Lim noted that “Although Bangladesh’s mobile phone market is driven by feature phones, smartphones’ share is also growing every quarter.”
Of the total mobile phones, smartphone’s share is estimated to rise to almost 50% from 28% by the end of 2017, he commented.
The rise of smartphone users is fuelled by the launch of affordable 3G devices. It is mainly driven by local brands such as Symphony and Walton. Global brands Samsung with its J series along with Huawei and Oppo are pushing up the 4G LTE-enabled smartphones, the next battleground for differentiation in Bangladesh smartphone segment in 2017.
“LTE capable smartphones now contribute to nearly one on four smartphones shipped in Bangladesh,” Counterpoint Research Analyst Pavel Naiya, said, adding that Bangladesh market is mainly dominated by local players with a combined share of two-thirds of the total mobile phone market.
Symphony Mobile remains the single largest mobile phone brand followed by Winmax mobile and others. Smaller Chinese brands continue to lose market share to Oppo and Xiaomi that have entered the smartphone market while local players are upping the ante with low-cost smartphones to sustain their market share, according to the research.
Uday Hakim, senior operative director, Walton, said: “No doubt, international brands are the big threat for us. At this moment, we need a friendly policy that will help us compete with international brands, or else, it would be tough to survive in this market.”
Industry insiders said local brands pay 15% vat on supplying level and 35% corporate tax, which they termed a huge risk factor.
Uday added that Vietnamese mobile brands have a huge dominance in the world after China as its government took some supportive policies for local mobile companies.
“If the government provides a 20 to 30-year tax holiday for local companies as Vietnam and India do, we will be able to produce cheapest handsets in the world.”
At present, there are 120 million mobile phone subscribers in the country. Of them, 63 million subscribe to mobile data plan of different sorts. The report pointed to the fact that although 10% of overall mobile phone subscribers got cut in 2016 due to biometric registration, mobile internet saw a 24% rise in subscriber’s number.
Handset importers of the country are eyeing a 25% growth in total sales of all kinds in 2017, said Bangladesh Mobile Phone Importers Association (BMPIA) president Ruhul Alam Al Mahbub.
He said in Bangladesh customers become interested in buying brand handsets as their buying capacity has increased.
“We have some limitations about skilled manpower and technology. It will take time to achieve that skill,” said Symphony Director (Marketing) Ashraful Haque.
In the country, over 40% population are connected to internet and there is a huge opportunity for the handset players to tap the first time users by offering affordable, yet quality smartphones.