Market Saturation – China Mobile Phone Industry Essay

China is the largest national market for nomadic phones and is a great beginning of grosss for companies. But as China’s economic rise and growing, its nomadic phone market has grown and gone highly fast, as possessing a smartphone has become a portion of what Chinese people need to demo their success and their money and as engineering rapidly gets upgraded. What could a market impregnation mean and imply for phone fabrication companies?

A impregnation of the Chinese nomadic phones market underlines that people won’t be purchasing as much merchandises as they used to during the last few old ages, and that there are adequate trade names representing the national offer.

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And there are phones for all gustatory sensations, premiums ( Samsung, Apple ) , low-priced ( Xiaomi ) or “improved” knock-offs. A new trade name which would desire to come in the Chinese market would hold some troubles to run into success, unless it benefits from a good repute from the remainder of the universe –in the instance of a foreign company.

But the recent illustration of Xiaomi perchance shows that the best scheme to put is to trust on an effectual distinction. High screen declaration phones, customizable phones, “lifeproof” phones, “phablet” phones, game-oriented phones are some of the assorted possible distinctions for new trade names that could win in the Chinese market.

The last portion of the article reads about the wants of China every bit far as nomadic phones are concerned. It seems that most Chinese people now have higher outlooks for their smartphones – China is non an under-developed state any longer and has to be considered as a market with detailed and evolved demands. As their degree of life additions and there are more and more rich people in China, the clients start to “Westernize” their outlooks, and companies have to take that into history in order non to undergo excessively many jobs confronting the market impregnation. Mobile phones now have to be cool, connected, fast, and multi-tasking – as the Western criterions.

Here is a important subject: the labour issues in China. Foreign companies tend to profit from the really slack Chinese statute law on work conditions. The articles even reads about deceases caused by overwork. Is the issue that serious in China?

It is widely known that Chinese people are considered good workers and that China is really interesting for foreign companies that wants to cut down their costs by holding a hardworking though inexpensive work force to piece their merchandises. Many houses benefit from the Chinese labour conditions in China, which have even been portion of the economic rise of the Asiatic state for 30 old ages. The first large reveal of such pattern was the Nike instance, the company being accused of utilizing sweatshops with unbearable work conditions in China in the 1990’s. Presents, it is Apple which is under the observation of many organisations and Westerners – chiefly because of its immense success in the whole universe, I think ; smaller companies with less cultural impact may hold the same HR issues but they’re non of import plenty to be at the centre of a contention.

Contrary to what many would believe, there are labour Torahs in China, applicable to all companies, whether local or foreign, as the article emphasizes. Workers at Apple mills are dedicated to their occupation: there are residence halls, they work all twenty-four hours long, they are underpaid, whatever the jurisprudence says. Apple do non esteem legal work conditions, but what could anyone make? Who is to fault for? Apple is an American-based company and Foxconn is owned but a Chinese transnational – that is a major job. Furthermore, both companies are highly successful and fecund so why would they alter their patterns whereas it works highly good like this? The many self-destructions and deceases that happened in Foxconn mills could be a ruddy signal, but Apple ever finds accounts to take the incriminations off itself.

Such job is so, to me, comparatively hard to get the better of, whatever the attempts of the Chinese authorities or external organisations. Foreign capitalist companies have ever seemed to be taking advantage of China and Chinese workers that manner, it will be complicated to do them understand that they should move otherwise.

This article focuses on Chinese invention refering the nomadic phone industry – which means phones every bit good as applications. Strong trade names such as Xiaomi or WeChat take part in the evident nomadic invention in China. But are all those trade names truly originative and original? Can we state that China is a major state in nomadic invention?

Didi seems to be merely a transcript of Uber created in the US, WeChat a knock-off of WhatsApp and Weibo the Chinese Facebook and Twitter – both being forbidden in China. But looking deeper, it is easy to see that those smartphone applications stand out compared to their Western equivalents, as the article points out. Equally good, Xiaomi is a low cost mobile phone company that offers merchandises much more evolved than the low cost trade names the US or Europe have – and the success of the trade name goes now even beyond the Chinese boundaries. In that sense, it could be said that Chinese companies truly are advanced but even more we can state that they really better what Westerners do – that is where their invention spirit stands. Indeed, China uses what the remainder of the universe creates to accommodate it to its local market and doing it even better. That is how I see invention in China: the Chinese do non truly make from nil, they are great perceivers every bit good as replicators and invent upgraded and evolved versions of Western thoughts. Besides, I would add that this is a loyal behaviour, as I see it: China culturally rejects foreign trade names and act against them and sometimes above them by “nationalizing” their thoughts and doing them even better – the well-known counterfeiting endowment of China is one illustration. Therefore, I agree with the author’s sentiment, naming China a new leader in the nomadic phone market.

As for the authorities assisting and back uping invention, it is something that I could easy believe, as China started a great invention program from 2006. This could enable more and more entrepreneurs-to-be ( or foreign endowments ) to make their companies and get down to introduce. Because of its History and civilization, China has long been a non-innovating state – a effect of Maoism and forced equalitarianism with all mark of capitalist economy and enrichment eliminated – and now it appears to alter. I believe it will escalate in the future thanks to authorities policies and its will to contend IP larcenies and to foreground invention: this is merely what China needs to back up its economic growing and to be considered as a true leader – and to scare the remainder of the universe.

The article sets an overview of what the nomadic phone retail market looks like now and what it should be like in the hereafter. Telephone shapers companies have to be cognizant of its development in order to outdo sell their merchandises, in a really disconnected and coming-to-saturation market. Given the facts in the article, what issues for nomadic phones companies can be brought out?

E-commerce is about to turn later in the following few old ages. It is a logical development, as China has been used for a long clip – earlier than the West, really – to online shopping and bringing, for whatever type of merchandises, with successful web sites such as Taobao or Alibaba. E-commerce sites are large rivals and menaces to phone shops, and local every bit good as foreign understood it and now pull off to accommodate to the Chinese’s wants: Apple is, for illustration, highly present online in China.

What I learn from this article is that the Chinese change their wonts. While the nomadic phone market is hitting impregnation ( see foremost article ) , non merely maker companies but besides retail merchants have to introduce and distinguish from their rivals in order to remain relevant and effectual. China is a fast-moving state and so tendencies are ever traveling and are reasonably unpredictable – and this has been that manner for 30 old ages. Companies and retail merchants have to be cognizant of that. Local trade names, as they know their market and are easy adaptable, would hold less concerns than foreign trade names which have to construct a strong apprehension of China and its people – really difficult occupation.

Such polemist does non give a good image of Chinese merchandises – if it could acquire even worse. Westerners ( possibly merely Gallic people really, but I think it is a general tendency in the West ) are paranoid refering made-in-China merchandises – and even more when they are from Chinese trade names! They are ever leery about that state and whatever comes from it – bias of bad quality, no security. So I can understand how the West has reacted when they heard that a Chinese trade name could hold been involved in political affairs and descrying activities against the US and Australia. China is the scoundrel and a unsafe state ( eventhough the US themselves spied the whole universe with their NSA, for different affairs ) ! !

Huawei has since so – whether the security issue and other intuitions have been really proved or non – go a “threat to national security” . This is bad advertizement for the company that is already reputed for selling bad nomadic phones and it could do jobs refering their international enlargement. Following this matter, Huawei could lose market portions in the West, people’s trust in Chinese merchandises – or even more in China in itself – acquiring even more damaged.

After that security issue, Huawei has been blamed for many other things such as funding Iran or the Taleban from Afghanistan. I think – whether it is true or non – it is chiefly a manner to make bad feelings from the universe against China, as it was the instance against Japan during the protectionist times of the US Japan-bashing. An anti-Chinese sentiment would be good as the state becomes more and more powerful economically – partially thanks to the West – and could endanger other economic systems. This could besides easy be seen as a signifier of xenophobia, a fright of China, in the sense that the Western universe can non truly make anything to halt or forestall the enlargement of China globally or in their ain state. If it works, Chinese trade names and particularly Huawei could hold a batch of problem come ining foreign markets.

China is really good known in the Western universe for being a large topographic point in footings of counterfeited points and knock-offs of everything, from merchandises to full trade names and services. And, of class, nomadic phones are no exclusion. Why do the Chinese forge so much? What are the benefits of it for them?

Forging seems to be an full portion of Chinese civilization, which even has a name – Shanzhai. For the few hebdomads I have spent in Beijing, I have seen many knock-offs of trade names such as Louis Vuitton, Apple or KFC. It is noticeable anyplace, therefore Shanzhai appears to be a truly good dispersed pattern in China and something that seems to be accepted and natural. Refering nomadic phones, Apple and Samsung knock-offs can be found anyplace, in “fake” shops or in markets.

What the article suggests is that it stands as a solution to employment and as a support of economic development. I can see the employment point – copying every possible trade name multiply the occupation offer in China, whose unemployment rate appears to be 4.10 % – but every bit far as economic development is concerned, I personally see the Shanzhai civilization more as a menace than as a support. Indeed, relationships with foreign companies and investing might be damaged by such patterns and so much counterfeiting could be seen as a deficiency of Chinese invention ( or, on the contrary, as another signifier of invention? Adapting foreign merchandises to the wants of the Chinese market? I don’t truly think so ) . It appears as a job, every bit good as IP rights unrespect in the state show, and as an unjust competition for trade names who sell the original merchandises. Shanzhai hurts growing, in the sense that it reduces China’s fight and this is non good for concern in the state.

This pattern therefore has a large impact in the Chinese universe. It seems to be truly built-in to China, loyal to Asian and Confucian values ( Bolshevism, “we” stronger than “I” , fright of failure, importance of money for success, rejection of Western trade names and beliefs… ) . But can the Chinese alteration? Actually, the authorities is seeking to do things alteration by reenforcing IP Torahs for illustration, and I think it is a good manner to stop the “copy and don’t innovate” province of head that Chinese people have and have had for long. But there still isn’t a mark of alteration because the job is now in people’s behaviours and beliefs, and that is non easy to modify. The government’s leap forward is a good thing to reassure foreign companies and investors.

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