(Yicai) Nov. 20 -- China’s smartphone exports fell 6.4 percent in the January to October period from a year earlier because of shrinking global demand and manufacturers relocating some production offshore.
China exported 642 million smartphones in the 10 months ended Oct. 31, data from the General Administration of Customs showed on Nov. 18. Exports jumped 10 percent to 81.1 million last month from a year ago.
China is the world's largest maker and exporter of smartphones, but global consumption of the ubiquitous devices has declined in recent years.
The industry has reached an innovation bottleneck, making consumers less willing to buy new handsets and extending the replacement cycle, leading to a global peak in demand, Gao Shiwang, director of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told Yicai.
Global phone shipments fell for the first time in 2018 and continued to decline in 2019 and 2020, with the figure at 1.2 billion units last year, according to data from market research institute Counterpoint.
China’s exports rose 2.4 percent to a record of more than 1.3 billion in 2015 from the previous year but have since dropped every year to 822 million in 2022. These exports accounted for 74 percent of the country's total smartphone output in 2015, compared with 53 percent last year. Most Chinese phones went abroad in 2015, while nearly half were sold locally last year.
Phone manufacturers shifting production to other countries also affects exports from China. South Korea's Samsung Electronics, which used to produce more than 70 percent of its smartphones in China and export the bulk of them, has gradually closed its plants in the country since 2014 and moved to Vietnam and other regions. Apple has also relocated some of its production out of China.
Since around 2015, Chinese phone makers have also built overseas plants to meet the needs of the markets where the factories are built. Popular destinations such as India have restrictions on importing handsets, including higher import rates and trade protection, a senior employee at a large manufacturer told Yicai.
Setting up plants in countries such as India and Ethiopia costs less than shipping phones from China because of favorable policies for building manufacturing bases there, according to handset maker Transsion Holdings. The Shenzhen-based firm will not sell products made in a plant in one foreign country to another because the cost is higher than deliveries from China, it added.
But there is still a chance that smartphones made in the plants of Chinese manufacturers in foreign countries such as India will be exported globally. Vivo Communication Technology shipped handsets made at its factory in India to Thailand and Saudi Arabia for the first time last year, the Dongguan-based firm said, predicting that it will likely export another 1 million units this year.
Editors: Shi Yi, Martin Kadiev