Marketing strategy of three Chinese & Taiwanese home appliance manufacturers: HUAWEI, Xiaomi, & ASUS

In this article, manufacturers based in China and Taiwan are referred to as "Chinese and Taiwanese home appliance manufacturers." Although they are home appliance manufacturers, most of their main products are digital and communication devices such as computers, tablets, and smartphones.

In recent years, Chinese and Taiwanese home appliance manufacturers have dominated the global market, and this trend is gradually coming to Japan as well. Here, we will provide a basic overview of three major Chinese and Taiwanese home appliance manufacturers: HUAWEI, Xiaomi, and ASUS.

HUAWEI is a company headquartered in Shenzhen, China that provides information and communications technology (ICT) infrastructure and smart devices and is said to be the world's largest company. They manufacture a variety of products such as smartphones, laptops, and wearable devices, but they are one of the largest in the world in the smartphone market and is still expanding. According to Taiwanese media “United Daily News,” it is predicted that HUAWEI will have the third highest market global share for high-end smartphones in 2023 following Apple and Samsung and is expected to reach top global market share for foldable smartphones in the first quarter of 2024. This exhibits the strength of HUAWEI's smartphone business.

United Daily News
https://tech.udn.com/tech/story/123151/7681814
https://udn.com/news/story/7240/7829698
HUAWEI Company Profile
https://www.huawei.com/jp/corporate-information

Xiaomi is a company headquartered in Beijing, China. It was founded as a smartphone company and has gained market share, but since being overtaken by Samsung and HUAWEI, it has shifted its business to smart home appliances that combine internet technology and home appliances. Although their smartphones still have a high market share worldwide, it is their smart home appliances that are attracting attention. It has opened a large number of offline specialty stores and directly managed stores called Xiaomi House and has gained popularity, mainly in China.
https://levtech.jp/media/article/column/detail_31/

ASUS is a company headquartered in Taipei, Taiwan that handles PCs, smartphones, PC parts, and peripherals. ASUS's most main product is motherboards (the important foundation for computers, on which CPUs and memory are installed), and they hold a 40% share of the global market. In other words, about half of the computers in the world are equipped with ASUS motherboards. In addition, high-end PCs for esports have achieved second place in the global market share, indicating that they are dominating the global market with their high-performance products. They are also involved in the smartphone business, and their main product is a high-quality smartphone called Zenfone.
https://cgworld.jp/article/asus.html

As we saw earlier, these three companies have gained global market share in digital products such as smartphones, but what kind of products do they focus on for the Japan market? Next, we will examine the products that are the most popular in Japan among the three based what information visitors to their official websites are interested in. For analysis, VALUES' online behavioral analysis tool Dockpit allows you to analyze competitors’ websites and investigate trends using your browser using behavior data that is updated monthly.

First, we have HUAWEI. The table below shows the most frequently viewed pages on the official website in a ranking format. Most of the top ten rankings are dominated by wearable devices such as smartwatches, including the HUAWEI Band series in third and tenth places, which shows that they are more popular than smartphones and tablet devices in Japan.

From this, it can be said that HUAWEI's main products in Japan are wearable devices such as smartwatches, which is different from the overall global market where smartphones are the mainstay. This may be due to conflicts that HUAWEI smartphones have had in various countries and its inability to use Google apps.

Next, we will conduct a similar analysis for Xiaomi. If you look at the table below, you can see that smartphones occupy the top of the ranking (including “Redmi 12 5G” in 2nd place, “Xiaomi 13T Pro” in 3rd place, and “Redmi Note 10T” in 4th place). From this, it can be said that Xiaomi's current popular products in Japan are smartphones.

In addition, it has been shown that Xiaomi will develop the Japanese market not only for smartphones but also for other products in the future. According to CNET Japan, with Xiaomi's presentation held in September 2023, it became clear that smart home appliances including tuner-less TVs (*), which were popular in the Chinese market, were being prepared for sale in Japan. It has been decided that KDDI will exclusively sell this tuner-less TV, and it can be said that Xiaomi is steadily securing its future sales network in Japan.
*A TV that does not have a “tuner” to receive terrestrial or satellite broadcasts, but instead has an OS such as Google TV and is specialized for enjoying streaming such as YouTube.

Finally, let's take a look at ASUS. Looking at the table below, you can see that the high-end smartphone “Zenfone,” gaming smartphones/PCs, and motherboards are ranked high. From this, it can be said that ASUS's products that are popular in Japan are its main products, which includes high-performance PCs, smartphones, and motherboards.

In addition, ASUS's main products are popular in Japan as well, with ASUS motherboards having the No. 1 sales share in Japan for 19 consecutive years since 2006, and gaming PCs having the No. 1 market share in Japan. I can see that you are making a profit.

So far, we have investigated how the three companies have developed their products in Japan. Next, by digging deeper into the number of people visit the three companies' official websites, we will analyze the customer demographics of the three companies and their referral routes.

First, we will look at the market size of the three companies based on trends in the number of visitors to their official websites. It can be seen that all three companies enter an upward phase at the timing of new product announcements and sales. The number of official website visitors per year was 2.24 million for HUAWEI, 2.03 million for Xiaomi, and 2.08 million for ASUS, and although there was no big difference in scale, HUAWEI was found to have the most visitors.

Next is the trend in the new visitor ratio. The graph below shows the percentage of new official websites visitors for each of the three companies. HUAWEI has gradually increased the percentage of new visitors, and as of February 2024, new visitors account for 45.1%, while ASUS's new visitor percentage has always been much lower at 20%. Differences in the characteristics of products such as HUAWEI's smart watches, which are widely used by many people, and ASUS' high-end content, which is mainly used in the gaming industry, may be creating the difference between acquiring new customers and acquiring repeat customers.

Next, we will also look at the ratio of official website visitors by gender and age group.
The graph below shows the ratio of men and women who visited the official websites of the three companies. Although all visitors to the three companies have a high proportion of men, HUAWEI's official website visitors have a relatively high proportion of women, while ASUS, in contrast, has more than 80% men. This may also be due to differences in product characteristics, such as smartwatches used by a variety of people and game-related content that is popular among men, same as when comparing the new visitor ratios.

We will also look into ratio of official website visitors by age group.
It can be seen that the percentage of visitors to the official website who are middle-aged and under 40 is increasing, perhaps due to the topic of information communication and digital devices. In addition, while HUAWEI attracts a wide range of age groups, with a similar age ratio to all internet users, it can be observed that ASUS has the highest proportion of younger customers among the three companies, and this is again due to the influence of differences in product characteristics.

Up to this point, we have investigated various characteristics of the number of official website and analyzed the customer demographics of the three companies. Although there were no major differences between the three companies in terms of market size, the following differences were observed in terms of customer attraction.
・HUAWEI: The customer base has a relatively wide range of gender and age group, and there are many new customers.
・Xiaomi: Many people are in the segment in between HUAWEI and ASUS
・ASUS: In contrast to HUAWEI, there are many repeat customers, including men and young people.

Next, we will analyze the traffic source of the three companies. The graph below shows the percentage of official website visitors by channel.
HUAWEI has a high proportion of items that correspond to advertisements (paid search, display ad, affiliate ad), whereas ASUS has a low proportion of items that correspond to advertisements, and a higher proportion of referral websites and organic searches than others. It can be seen that the characteristics of the customer segment are reflected in the traffic sources, with HUAWEI having many new visitors and a wide range of gender and age groups, and ASUS having many repeat visitors.

So far, we have analyzed the products, customer base, and traffic source of the three companies in the Japanese market, but what is their competitive relationship with Japanese companies? Next, we will also analyze Japanese companies that are competitors of the three companies, and clarify the demographics for comparison between Japanese and Chinese/Taiwanese manufacturers.

Next, we will look for competitors from the perspective of content that is of interest to people who searched the official websites of the three companies. The table below shows in the order of left to right, HUAWEI, Xiaomi, and ASUS, the content of interest of those who searched each official website, narrowed down to websites in the “home appliance company” category defined by VALUES (what other official websites from other home appliance companies did they visit) shown in ranking format. Looking at the table, you can see that among Japanese companies, Sony and Sharp are ranked in the top five for content that is of interest to multiple companies. Based on this result, we will analyze Sony and Sharp as competitors.

Next, we will analyze and compare it with its competitors Sony and Sharp. The analysis items are the same as before, the number of official website visitors, the ratio of new visitors, the customer traffic sources, and the combined usage.

First, let's compare the scale based on the number of official website visitors. Looking at the graph below, you can see that Sony and Sharp far exceed the three Chinese and Taiwanese home appliance manufacturers in terms of the number of official website visitors. From this, it can be said that the three Chinese and Taiwanese home appliance manufacturers are currently far ahead of their Japanese competitors, Sony and Sharp, in terms of market size.

Next, let's look at the new visitor rate. The new visitor ratio for both Sony and Sharp is around 10%, indicating that most of them are repeat visitors. This may be because the market size of both is very large and recognition is high enough.

Similarly, we will also look at the traffic sources. Sony and Sharp differ significantly from the three Chinese and Taiwanese home appliance manufacturers in that they have a low rate of organic searches, while Sony's official website is visited from an referral websites, and Sharp's official website is visited via email. Sony ranks first in sales among Japanese electronics manufacturers (as of the end of fiscal year 2023), and this may be why the rate of traffic to Sony's official website is increasing among referral websites that allow comparisons of various home appliance manufacturers. Sharp's e-mail newsletter (COCORO MEMBERS), which is used by over 7 million people, may have led to this result.

Finally, in order to clarify the segment of consumers in the consideration stage of both Japanese and Chinese/Taiwanese manufacturers, we will look at the combined use from both Sony and Sharp’s perspectives.

First, let's look at the usage of Sony's official website in combination with other official websites. From the graph below, the percentage of people who visited Sony's official website and also visited Sharp's official website was just over 20%, while those who visited the official websites of Chinese and Taiwanese home appliance manufacturers was less than 5%.

We will also look into the combined use from Sharp's perspective. Of those who visited Sharp's official website, the percentage of those who also visited Sony's official website was just under 30%, while less than 5% visited the official website of a Chinese/Taiwanese home appliance manufacturers. The results were similar to those seen by Sony.
Based on the above, it can be said that there are currently few people who are considering comparing Japanese and Chinese/Taiwanese home appliance manufacturers.

The results so far suggest that the three Chinese/Taiwanese home appliance manufacturers are significantly inferior in the Japanese market compared to Japanese companies in terms of scale, and there are still fewer people who are considering comparing Japanese home appliance manufacturers and Chinese/Taiwanese home appliance manufacturers. However, since the three companies have only recently entered the Japanese market, there is plenty of room for growth, so it will be interesting to see what strategies they will adopt in the future to expand their scale in the Japanese market.

So far, we have analyzed the popular products and customer demographics of three major Chinese/Taiwanese manufacturers that have expanded into Japan: HUAWEI, Xiaomi, and ASUS. We briefly summarized the results of the analysis.

・HUAWEI's mainstay product in Japan is smartwatches, attracting customers from both men and women and wide age range, and a high percentage of new customers.
・On the other hand, ASUS focuses on high-end products mainly for the gaming industry, and repeat customers make up most of its customer base.
・Xiaomi has solidified its foothold in the Japanese market with its smartphone business and is planning to develop the Japanese market with various products such as smart home appliances. The customer base can be said to be somewhere between HUAWEI and ASUS.
・The market size is small compared to competitors in Japan such as Sony and Sharp, and there are still very few people who are considering comparing Japanese and Chinese/Taiwanese manufacturers.

The three Chinese/Taiwanese home appliance manufacturers we dealt with this time are large companies that are gaining a large market share worldwide. Each of the three companies' products has great strengths, such as high performance, low price, and high degree of user freedom. Under such circumstances, what strategies will the three companies adopt to promote their strengths in the unique Japanese market, often referred to as the “Galapagos market.” It is worth keeping a close eye on in the future.

▼Data from Dockpit was used in this case study. Dockpit is an online behavior analytics tool provided by VALUES, Inc., and it allows you to access online behavioral data (updated monthly) via your browser so you can research competitor websites and investigate trends. There is a FREE version of Dockpit, so if you are interested in using it, please register below.