Chinese equipment manufacturers thrive not by mistakes but by merit

By Choi Sung-jin

When Xiaomi put to market second batteries and digital scales years ago, the quality was far better than expected that Koreans joked the company was the “continent’s mistake.” It didn’t take long, though, for the Chinese manufacturer of inexpensive but competitive equipment to be called the “continent’s merit.” And Xiaomi is not the only one.

LG Uplus, the nation’s No. 3 mobile carrier, said Friday it has sold more than 5,000 units of the Y6 smartphone released by Huawei, reflecting the rocketing popularity of the new budget handsets among Korean consumers.

In barely more than a week after debuting, Y6 has made it onto the top-10 list of domestic smartphone sales by selling more than 700 units a day.

The Chinese-made smartphone, which went on sale Dec. 16, comes with a price tag of 154,000 won ($131.50), but is almost free if a user subscribes to a monthly plan of 30,000 won, the Korean carrier said. The Y6 has a five-inch high-definition display, 1GB memory and a 2,200 mAh detachable battery. It runs on Android Lollipop 5.1, provides radio without consuming data, and can be used as an Internet phone.

“Korean consumers regard the Chinese phones as relatively good in terms of performance per price,” said a phone vendor. “They can hardly be compared with Korea’s premium phones but consumers who do not seek widely diverse functions should find Chinese products suffer nothing by comparison.”

Huawei has been making efforts to tap into the Korean market largely dominated by Samsung Electronics and LG Electronics. The Chinese company has increased its network of tech support to 51 service centers, and plans to expand it further, company officials said.

Industry analysts here say the Y6’s popularity is not due just to its low price tag. As Chinese manufacturers armed with low-priced but “usable” products _ such as smart bands, smart TVs and electric scooters _ have entered the domestic market slowly and steadily, consumers’ perceptions of made-in-China equipment have sharply improved. Huawei’s Nexus 6P, a Google phone with a 590,000-won price tag, was also the best seller in December among mid- to low-priced phones, according to a tally released by SK Telecom through an online shopping mall.

In the past, Samsung and LG used the Chinese market as a stepping-stone in their advances to the global market, the analysts said. Now, the Chinese phone makers are not just crowding the Korean companies out of the Chinese market but are infiltrating into the Korean market armed with extra-inexpensive products unimaginable by their Korean competitors.

“When Huawei first introduced its budget handset, X3, Korean manufacturers and consumers paid little attention to it,” said an industry executive. “The situation has completely changed in just a year, and the popularity of Chinese products is spreading to other home appliances.”