Oppo, Xiaomi, Vivo – with the market expanding massively, the leading players compete in Southeast Asia

Wu Qiang, the global sales president of Oppo, who was sitting in the interview seat, looked tired. 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 he has been engaged this business for many years, he still needs to face many changes in the global mobile phone market.

In 2019, after Huawei encountered economic "black swans" overseas, its business shrank across the board. Oppo, together with its sub-brand Realme, took advantage of the trend and made progress in Southeast Asia and India, meanwhile, it seized the opportunity in European market through 5G mobile phone. Xiaomi's unexpected success in Europe has further expanded its overseas market share after occupying India. However, 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 layout in 5G era? How to build IOT concept and ecology? How to balance the entry of high-end brand and its market share? These problems will dog Wu Qiang and his opponents.

1. Xiaomi's 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. "He was kicked upstairs actually, and Xiaomi has a lot of stocks overseas." Now, the overseas burden is on the successor Zhou Shouzi. Yang Bin, a former employee of Xiaomi (not his real name), told Tencent News.

The overseas market of Xiaomi is divided into three regions, the first is the Southeast Asian market; the second is Indian market, which has developed 5 years; the third is the European market. In 2019, Xiaomi rooted in Southeast Asia market, with some popularity. However, the disadvantage is that it doesn't establish a good relationship with local channel providers and agents.

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, local agent Erajaya's inventory is overstocked, "the peaking reaches 2 million units."

In Xiaomi company's sales system, "I worked in Xiaomi for three years, and the word "grey goods" is said almost every day." Yang Bin said. The commodity refers to the mobile phone and other products which are sold through official regular channels, while the grey goods are not officially sold. "Some people buy the goods to the trading company internally. After the trading company gets the goods, it will sell them to the market where the money is high, and earn the price difference in the middle, which is called the grey market. Sometimes, grey goods account for half of overseas sales. "

The Internet mobile phone distribution mode sometimes leads to the disconnection between production and sales, in which grey 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 is like drug taking, which is addictive. The grey goods traders are only interested in price difference and have no loyalty to Xiaomi.

On the other hand, grey goods play a role in the global market. In India, Indonesia, Spain, Ukraine and other regions, according to the positive feedback which the grey goods market gave, Xiaomi decided to follow up its official channel.

In 2019, Xiaomi was besieged by Oppo in Southeast Asia market, and its market share stopped growing. In addition to Oppo, with the help of the offline store resources accumulated by Oppo, Realme seized Xiaomi's market with its price advantage. Meanwhile, it also attracted some Xiaomi's 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 ranks second with 7.3 million shipment volume; Vivo ranks third with 4.1 million; Xiaomi ranks fourth with 3.7 million; Realme have entered the top five position of Southeast Asia's smartphone market for the first time with 1.6 million, mainly seizing Xiaomi's share.

In India, Manu Jain, the head of Xiaomi, tried his best to resist the entry of grey products and maintained its leading position. 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. According to Xiaomi company in India, the total revenue of Xiaomi Technology India increased 54% year on year in 2019 financial year, and it reached RMB34.8 billion. In 2018 financial year, 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. "First is to join in operators, after two or three years of cooperation, it will replace the go-between company. Both sides take what they need," Yang Bin said

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

2. Oppo's rapid development in overseas market

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 link for global business development, and Thailand is the first point for Oppo's overseas market. After years of operation, Oppo has established an extensive sales and service network 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 audio, 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 Tangerang, 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 built factories in India in the same way.

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 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 all-round layout makes the Oppo faster when it grabs market share during acceleration.

Take the Realme as an example, it can access to Oppo offline stores in Southeast Asia. Most Realme online products with similar configuration and more favorable price can compete with Xiaomi. The layout of Oppo is very clear. It takes advantage of Realme to occupy the low-end market, at the same time, subsidizes Realme with the profit earned by Oppo.

According to Counterpoint's Spanish market data in November this year, Realme has entered Europe for only a month and a half, and has become one of Spain's TOP 5 mobile phone brands. Meanwhile, it has become the fastest growing mobile phone brand.

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 it also 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 segmentation in Switzerland.

Subsequently, Oppo entered the UK local operator EE, in 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, "Western European developed countries do not take subsidy policy, and 5G business promotion is not as fast as China in the construction of network. Therefore, there will be a relatively long time cycle." Wu Qiang predicted.

3. 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, the shipments of Vivo has reached nearly 17 million in India. According to this trend, throughout 2019, Vivo's shipments in India should be around 25 million. Compared with the same period last year, the recovery of Vivo increased by 58.7%.

"In the first five years, Vivo spent its existence phase in India, and in the next five years, how to lead the market is the focus," Chen Zhiyong, CEO of Vivo India, told the Chinese media group in December.

A reporter asked Chen Zhiyong, after the rise of Realme, and the development of Xiaomi is also more radical in India, how can Vivo compete on online market? "We haven't done a good job in the area of online, and we have focused on offline consumers relatively more in the past few years. For a brand, online and offline are equally important, " Chen said.

The BBK department (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 Chinese market to test the market 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 from "seeking speed" to "seeking stability" in India. From 2016 to 2017, "In a short period of one year, Vivo has expanded its channels more than five times, which is really too fast. Later, we gradually understand that many things in India cannot be too fast." Chen said. At present, Vivo has more than 10000 employees in India, and more than 40000 employees in the sales system ( sales assistant + salesman + trainer).

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

"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," said Wu Qiang. Before that, on January 31, 2018, Oppo officially entered the Japanese market. In November, OnePlus, 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. Chinese mobile phone brands want to have a firm footing in developed countries, like Apple and Samsung, which still takes a long time.

This is an article from WeChat official accounts qqtech (ID: qqtech), written by Pu Xiang, translated by Chris Yuan.