Domestic mobile phones compete in Southeast Asia: oppo’s fierce Xiaomi growth

Wu Qiang, the global sales president of oppo, who was sitting in the interview seat, looked tired. When answering questions, he could guess the ending. He didn’t want to waste his words. In the past two weeks, he has traveled to Kuala Lumpur, Bangkok and Shenzhen, and arrived in Hangzhou before the Reno 3 Conference on December 26. After the group visit at the conference that day, he had to fly to the next city.

Even if you have been a veteran for many years, you still need to face many changes in the global mobile phone market.

In 2019, Huawei mobile phone encountered policy Black Swan overseas and contracted across the board; oppo, together with its controlling realme brand, took advantage of the trend and made progress in Southeast Asia and India, and seized the gap in European market through 5g mobile phone. Xiaomi’s unexpected success in Europe has further expanded its overseas market share after occupying India. Vivo’s online channel development still stays at home, and the foreign market still lags behind other competitors. The offline channel has grown in India, but the overall pace of progress is slightly frustrated.

Next, how to play 5g? How to build IOT concept and ecology? How is the balance between the brand’s move to high end and its market share? These problems will test Wu Qiang and his opponents.

Xiaomi balance speed and scale

On November 29, 2019, Xiaomi announced that Wang Xiang, senior vice president of Xiaomi in charge of overseas business, was promoted to President of Xiaomi group. &”The appointment has gone up and down, and Xiaomi has a large number of stocks overseas. &Now, the overseas burden is on Zhou Chengzi, the successor. Yang Bin, a former employee of Xiaomi (not his real name), told Tencent News that he was looking forward.

Xiaomi overseas is divided into three regions, the first is the Southeast Asian market; the second is to enter the five-year-old Indian market; the third is to officially enter the European region for more than one year. In 2019, the Southeast Asia market & ldquo; won the establishment of Xiaomi brand in Southeast Asia, with some popularity. However, the disadvantage is that it has no good relationship with local channel providers and agents, and no money is made by others. ”

In order to impact the listing of Hong Kong stocks on July 9, 2018, Yang Bin said that from the beginning of 2018, various channels began to suppress goods and required full payment. In Indonesia, erajaya, the local agent, was overstocked during the & ldquo; peak period, reaching 2 million units, almost hanging up. ”

In Xiaomi company’s sales system, & ldquo; I have been in Xiaomi for three years, and the word “aquatic products” is used almost every day. &Said Yang Bin. Commodities are mobile phones and other products sold through official regular channels, while aquatic products are not officially sold. Some people buy goods to trading companies internally. After trading companies get the goods, they will sell them to the market with high payment, which is called the aquatic market. Sometimes, aquatic products account for half of overseas sales. ”

The Internet mobile phone distribution mode sometimes leads to the disconnection between production and sales, in which aquatic products can play a regulatory role and clean up the inventory without damaging the brand. The scale of production maintenance can increase bargaining chips with upstream suppliers and reduce production costs. However, depending on the channel of aquatic products is like “opium smoking”. The traders of aquatic products only come to earn the price difference and have no loyalty to Xiaomi brand.

On the other hand, aquatic products play a role in the global market. In India, Indonesia, Spain, Ukraine and other regions Xiaomi later entered, the early water market gave positive feedback, and later Xiaomi’s official channel followed up.

In 2019, Xiaomi was besieged by oppo in Southeast Asia market, and its market share stopped growing. In addition to the oppo brand, with the help of the offline store resources accumulated by the holding company oppo, and with a more cost-effective product offensive, realm seized the Xiaomi market. In addition, it also attracted some Xiaomi employees to join in.

Take the second quarter of 2019 as an example, according to canalys data, the total shipment volume of Southeast Asia smart phone market is 30.7 million. Among them, Samsung ranks first; oppo’s 7.3 million units ranks second; vivo’s 4.1 million units ranks third; Xiaomi’s 3.7 million units ranks fourth; realm’s 1.6 million units have entered the top five position of Southeast Asia’s smartphone market for the first time, mainly seizing Xiaomi’s share.

In India, Manu, the head of Xiaomi India, tried his best to resist the entry of aquatic products and maintained a relatively independent kingdom. As of September 2019, Xiaomi continued to rank first among Indian smartphone manufacturers with a market share of 27.1%, according to IDC, a market tracking agency, but slightly decreased from 27.3% last year.

The good news is that Xiaomi is increasing its unit price. In fy19f, the total revenue of Xiaomi Technology India increased 54% year on year to reach rmb34.8 billion. In fy2018, the total revenue of Xiaomi Technology India was rmb22.7 billion.

In the past two years, Xiaomi has made great progress in the Spanish market. After seeing the activation of Xiaomi’s mobile phone in Spain, Xiaomi on the one hand set up a large retail regular channel through official agents in Spain; on the other hand, it took some measures to quickly enter the European operator channel. Huawei sells equipment to global telecom operators and accumulates a lot of resources. Xiaomi paid some remuneration through the recruitment of former Huawei executives, with the help of relevant people, and then took the mobile phone and related products to enter the carrier channel. &”Advanced operators, after two or three years of cooperation, replace the bridge company. Both sides take what they need. &”It’s a bit like a launch vehicle,” Yang said. “When you are very small, you need to use the help of an intermediary company to fly to the sky. When you have a secondary rocket, you lose the intermediary company.”. ”

In Ukraine, Xiaomi met a former Samsung agent, and the talent and team basically didn’t need to be stationed to ensure the supply of goods. The Ukrainian agent team is relatively independent and strong in its own operation. At present, Xiaomi mobile phone has become the No. 1 mobile phone in the country, with an annual output of about 1 million mobile phones. &”Ukraine is a more positive example. ”

Oppo is fierce overseas

Unlike Xiaomi, after years of development, oppo has gradually built integration in overseas channels, factories and services. Oppo regards the Asia Pacific mobile phone market as an important “strongpoint” for global business development, and Thailand is oppo’s first foothold in the sea. After years of operation, oppo has established a wide range of sales and service networks in the Asia Pacific region, including more than 52000 sales points, more than 44000 sales personnel, 250 self built service centers, one hour quick repair and international joint insurance services, etc. After ten years of development, the accumulated active users of oppo in the Asia Pacific market will soon exceed 100 million.

On October 18, 2019, oppo opened a flagship store in the embartier shopping center in Bangkok. In addition to retail, the store has upgraded a variety of interesting interactive experiences: drones, cameras, Bluetooth speakers, wireless headphones, flash chargers, AR / VR smart clothing and robots, from large screens to smart phone screens, all part of the product line.

Oppo plant is located in tanglan, Indonesia, which was put into operation in 2014. The factory covers an area of 27000 square meters and is oppo’s first mobile phone factory overseas. It is mainly composed of logistics warehouse, mobile phone production line and quality control center. At the initial stage of production, the new oppo plant has a capacity of about 30000-40000 units per month. Later, it was the same way to build factories in India.

Data from canalys, a research institution, also shows that oppo is at the forefront of many markets in Southeast Asia. In the Philippines and Indonesia, oppo is the most popular mobile phone brand, with the sales market share ranking first all year round; in Thailand, Vietnam and Malaysia, oppo ranks second.

According to Euromonitor International. In 2019, the share of oppo in Vietnam reached 23.6%, with the fastest growth in the Asia Pacific region.

The system layout makes the oppo system appear very fast when it grabs market share during acceleration.

Take the realm as an example, offline oppo stores in Southeast Asia can be accessed. Most of the online products are benchmarked Xiaomi, with comparable configuration and more favorable price. The layout of oppo department is very clear. It can sell at a loss by taking advantage of the low-end market with realm and subsidize realm with the profit earned by oppo brand.

According to market analysis agency Counterpoint’s Spanish market data in November this year, realme entered Europe for only a month and a half, and has become one of Spain’s TOP 5 mobile phone brands, becoming &ldquo and the fastest growing mobile phone brand &rdquo.

On December 16, 2019, oppo Asia Pacific Strategy Conference was held in Kuala Lumpur, Malaysia. Facing the industry chain partners of Asia Pacific market, oppo released its new business layout and development strategy for 5g era, and announced the establishment of oppo Asia Pacific Center in Kuala Lumpur. In the new period, oppo is trying to play a leading role in Southeast Asia when 5g comes.

In an interview at the Reno 3 conference, Wu Qiang revealed some international market performance. Oppo is the first manufacturer to officially release 5g mobile phones to the Western European market, and also the first manufacturer to officially sell 5g mobile phones in the Western European market (may 2019). In the first few months, oppo Reno 5g mobile phones accounted for about 20% of the 5g segment in Switzerland.

Subsequently, oppo entered the UK local operator EE (BT), and its relatively conservative UK oppo products accounted for 12% of 5g products in the EE system. In Australia, it has about 70% market share in 5g field. On the whole, & ldquo; Western European developed countries do not subsidize, 5g business promotion is not as fast as China in the process of network construction, and there will be a relatively long time cycle. &”Wu Qiang predicted.

Vivo increases slowly, waiting for the opportunity

In the third quarter of 2019, vivo ranked third in the smartphone market in India with 7.1 million smartphone shipments and 15.2% market share. In the first three quarters, vivo has sold nearly 17 million smartphones in India. According to this trend, throughout 2019, vivo’s smartphone shipments in India should be around 25 million. Compared with the same period last year, the recovery of vivo smart phones increased by 58.7%.

In an interview with the Chinese media group in December, Chen Zhiyong, CEO of vivo India, said that & ldquo; in the first five years, he spent his life in India, and in the next five years, he thought about how to lead. ”

A reporter asked Chen Zhiyong, after the rise of realm, the rising speed is fast, Xiaomi is also more radical in India, how can vivo compete online? “We haven’t done a good job in the & ldquo; online segment yet,” Chen said. “In the past few years, we focused more on offline consumers.”. For a brand, online and offline are equally important. ”

The step-by-step system (including oppo and vivo) that is good at offline operation is slightly different in terms of online strategy. Since 2019, oppo has made progress at home and abroad, and vivo has first selected the domestic market to test the water with iqoo brand. In 2020, after solving the inconvenience of some brand names in Western Europe, vivo has taken action.

Vivo has experienced a change in India from “seeking speed” to “seeking stability”. From 2016 to 2017, & ldquo; in a short period of one year, vivo has expanded its channels more than five times, which is really too fast. Later, we slowly understand that many things in India cannot be too fast. &Said Chen Zhiyong. At present, vivo has more than 10000 employees in India, and more than 40000 employees in the sales system (shopping guide + salesman + trainer).

Vivo has gained some market share in Southeast Asia market and India market represented by Indonesia and Thailand, but facing the three most difficult developed markets in the world, Japan, Germany and the United States, vivo is more cautious than oppo system.

Wu Qiang of oppo said that & ldquo; there will be some new blank markets in 2020, and there are plans to enter European markets such as Germany, Romania and Portugal. In addition, it will enter the Mexican market in the Americas and even Africa. &Before that, on January 31, 2018, oppo officially entered the Japanese market. In November, one Canada mobile phone, which has a deep relationship with oppo, has entered the T-Mobile operator channel in the United States.

Of course, these are at an early stage. Domestic mobile phone brands, like apple and Samsung, have a firm foothold in developed countries, which is still to be seen.