• Chinese Smartphone Oppo

Chinese Smartphone Oppo (Photo : Getty Images)

Chinese smartphone makers are extending their market reach with the aim to expand globally and challenge other players such as Apple and Samsung.

A CNBC report said that Oppo and Gionee are making waves overseas with a plan to expand to the U.S.

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Last year, Huawei became the world's third biggest smartphone maker, in terms of market share, closely following Apple and Samsung.

Meanwhile, Oppo's global shipment increased by more than 111 percent year-on-year in 2016, becoming the third largest in the world while Vivo grew by 77.9 percent, the fifth largest, based on data from Counterpoint Research.

According to the report, three of the top five smartphone makers in the world came from China and more Chinese smartphone companies are aspiring to enter the competitive smartphone market.

At Mobile World Congress in Barcelona last week, Chinese firms made a big presence, led by Huawei, which held a press conference, while Oppo introduced a new camera technology and Gionee unveiled the A1, a high-spec smartphone, priced at 349 euros ($369).

Expansion strategies

Oppo, Vivo and Gionee succeeded in China by selling offline, which allowed them to reach into smaller towns and cities. They have also expanded into other Asian countries such as Indonesia, India and Thailand, with sites in Africa and the Middle East.

Part of the expansion of these companies may be attributed to advertising efforts and sponsorship deals, the report said.

Gionee CEO William Lu said the company now aims to increase their shares in 50 markets in several countries where their phones are available.

"I think more important is not adding more countries for now, but going deep in each country," Lu said in an interview last week.

The company said that it will try to replicate what they did in India, where 4,000 stores have stocks of their phones. 

For Oppo, they succeeded in some developed markets by selling models where users buy contracts from mobile phone operators to have the phone subsidized.

"Recently we have expanded into a number of carrier led markets, such as Taiwan, Singapore, Australia and most recently, New Zealand. The response to date has been extremely encouraging. In Singapore we're now number 3 in the market.

"Likewise in Australia we have signed agreements with major carriers including Vodafone, Virgin and Optus and are experiencing triple digit growth," Sky Li, managing director of the international mobile business at Oppo, told CNBC.

"Our experience in these markets will help us better understand consumer behavior and prepare us for future expansions," Li added.

U.S. and Western expansion

But analysts warned Chinese companies about expanding to the U.S. right away, as they might be faced with intellectual property issues. In addition, the environment for Chinese firms to do business in the U.S. may not be good, considering Trump's threat to impose high tariffs on Chinese imports.

But despite this, Chinese firms are not worried about the issues.

"I don't see that risk because I think the China-U.S. relationship is the most important relationship in the world, we need each other," Yuanqing Yang, CEO of Lenovo, said in an interview last week.

Although many Chinese smartphone companies are now focused on countries where they are welcomed, they are not dismissing their plans to enter the U.S. and other Western markets in the future. 

"I think the Gionee brand is not ready to enter in U.S. or Europe, but if we partner with local brands and offer products with them and work with them to understand this market, then we might be able to," Gionee's Lu said.

"For the developed markets, we have a plan to go step by step and not rush," Lu added.