Ov and Xiaomi’s Chinese market share continues to decline, and India, the world’s second-largest smartphone market, may be a lifeline. Who can seize the opportunity?
Editor’s note: This article is from WeChat public account “Zhixiang.” (ID: Passagegroup), author Andolini.
Ov, Xiaomi’s market share in China continues to decline, and India, the world’s second-largest smartphone market, may be a lifeline. Who can seize the opportunity?
400 billion is a new milestone for BBK Group in India.
According to the latest submissions from OPPO and vivo, the total sales of these two brands in India reached 387.26 billion rupees (about RMB 38 billion) in the fiscal year ending March 2019, with a growth rate of 67%.
With the joint promotion of these two brands, its parent company, BBK Electronics, reached a new height in India, with revenues exceeding 400 billion rupees (about 40 billion yuan).
Although Xiaomi has not yet released India’s financial data for the fiscal year 2018-2019, from last year, Ov’s total revenue in the Indian market is slightly better than that of Xiaomi, which is the second largest intelligence in India after Samsung. mobile phone manufacturer.
What makes friends even more eye-catching is that OnePlus, which is also a step by step, is still in the leading position in the high-end smartphone market in India (more than 3,000 yuan). In the third quarter of 2019, its share in the high-end market was 35%.
In addition, according to IDC data, realme, which has gone out of OPPO independence, has also increased its market share in India in the second quarter of this year from 7.% in the same period last year to 7.7%, ranking it to fourth.
In China, the mobile phone market is saturated, the frequency of consumer replacement is decreasing, and the mobile phone market share is gradually decreasing, which directly leads to more intense competition among mobile phone brands. In 2019, the market of vivo and oppo slowed down, and began to change the style of various advertising inputs and celebrity endorsements. It opened up a big way of cost-effectiveness and entered the online market, directly pushing the backyard of Xiaomi mobile phone.
In India, in addition to the annual flagship in this sub-continent, Ov’s Z-series, K-series and other products, including the focus on the realme brand, has gradually formed a circle of millet and red rice.
For the OPPO, vivo, and millet manufacturers, the Chinese market has entered the era of stocks, and its share has continued to decline. Perhaps India, the world’s second-largest smartphone market, is a life-saving straw. The question is, who can really get it in their hands?
Ov sales increased by 67%, but still not profitable
The clock dialed back two years ago. In FY2017, the sales of BBK mobile phones in India reached 143.43 billion rupees (about 14 billion yuan), and it was the second largest mobile phone manufacturer in India. It was also from that time that Apple and Lenovo disappeared from the top 5 of the market research institutions and were classified as Others.
In the 2018 fiscal year, according to RoC documents, OPPO and vivo each crossed the milestone of 100 billion rupees (about 10 billion yuan) in the Indian market. OPPO India’s total revenue increased by 49% to 119.943 billion rupees (about 119 billion yuan), and the total income of vivo India increased by 78% to reach 111.793 billion rupees (about 11.7 billion yuan).
According to India’s “Economic Times” report, in the 2018-2019 fiscal year, OPPO and vivo continue to maintain an amazing growth rate in the Indian market. According to the latest documents submitted by OPPO and vivo, the total sales of the two brands reached 387.26 billion rupees (about RMB 38 billion) in the fiscal year ending March 2019.
Although their cardinality is relatively high, their growth is still a staggering 67%.
In the case of separate accounting, OPPO India’s sales increased by 80% to 215.246 billion rupees (about RMB 21 billion). In the fiscal year of 2018-2019, vivo’s revenue increased by 54% to reach 1720.179 billion rupees (about 17 billion yuan).
In addition, BBK Electronics also owns the OnePlus and Realme smartphone brands, but they have yet to announce their Indian sales in FY 2019.
In the 2017-2018 fiscal year, BBK’s total mobile phone brand revenue in India reached Rs. 231.48 billion (approximately RMB 23.1 billion), making BBK Group the second largest smartphone manufacturer in India.Slightly ahead of its main competitor, Xiaomi, whose total revenue for the year was Rs. 230.6 billion (approximately RMB 23 billion).
However, BBK Electronics is still not profitable in India because neither OPPO nor vivo have achieved breakeven. According to the data in the filing, OPPO and vivo increased their total losses in FY 2019 by 47% to Rs 0.77 billion (approximately RMB 700 million).
In the last fiscal year, OPPO’s net loss increased by 93% to Rs. 8.8 billion (approximately RMB 680 million), while vivo managed to reduce net loss from Rs. 1,243 crore (approximately RMB 120 million) to 191 million rupees (about 19 million yuan).
In contrast, Xiaomi and Samsung have been profitable in the 2017-2018 financial year. Samsung’s sales in FY 2018 were 373.49 billion rupees (about RMB 37 billion), leading the Indian mobile phone market. However, as of now, Xiaomi and Samsung have not disclosed their Indian financial report for the fiscal year 2018-2019.
The analysts said that OPPO and vivo’s losses in India have increased, mainly because they have significantly increased spending on fixed assets (such as real estate and equipment) and manufactured excess inventory.
Mohit Yadav, founder of VeratechIntelligence, a business intelligence platform, said: “Because India’s mobile phone tariffs are about to increase, BBK Electronics is actively improving its manufacturing capabilities in India.”
“The same is evident in the significant increase in material consumption costs, the material cost of vivo has increased by 68%, the material cost of OPPO has increased by 109%. More importantly, the inventory of vivo and OPPO has increased by nearly 300% and 200%, which also shows BBK’s confidence in the Indian market,” Yadav said. “The company believes that mobile phone consumption will not slow down soon.”
OPPO Mobile India said in an e-mail that India is still a high priority market and that the company has been investing heavily to increase manufacturing and R&D levels and increase customer touch points.
vivo announced on November 6 that as part of its investment plan of 75 billion rupees (about 7.5 billion yuan) in India, the first phase of vivo construction of a new manufacturing plant in Uttar Pradesh has started.
Based on market share, the three brands of BBK, vivo, OPPO and realme, are the third, fourth and fifth largest smartphone brands in India. In India’s high-end smartphone market (prices of 30,000 rupees, about 3,000 yuan or more), despite the fierce competition between Apple and Samsung, OnePlus is still in the lead.
OnePlus has an annual growth rate of 95%, with an emphasis on expanding offline
“In terms of revenue share, we are now among the top five brands and account for 4% of the industry’s total value,” said Vikas Agarwal, General Manager of OnePlus India.
According to the third quarter of Counterpoint Research, OnePlus sales grew at an annual rate of 95%. In contrast, Apple’s annual growth rate is 45%, and Samsung’s annual growth rate is 35%.
With OnePlus 7T and OnePlus 7T Pro, OnePlus achieved the highest ever shipments of 740,000 units in the third quarter, up from 660,000 units in the second quarter and 24 in the first quarter. Wantai.
A record was born: this is the highest shipment of high-end smartphone brands in the past three years. In addition, Agarwal said it was the only high-end smartphone brand in the quarter that sold more than 500,000 units and achieved record growth.
Overall, in the third quarter of 2019, India’s high-end smartphone market reached its highest ever shipment of 2.14 million units. The market segment’s annual growth rate also reached a record 66%. This is mainly driven by OnePlus.
Counterpoint’s data shows that the average selling price of this segment has achieved healthy growth this year, with an annual growth rate of 20%. It is expected that the average price will rise from nearly $140 to $200 three years ago.
Agarwal said that OnePlus’s growth rate is higher than the industry growth rate of the high-end market. According to Counterpoint’s data, OnePlus has grown faster in the ultra-high-end (45,000 rupees and above, about 4,500 yuan) segment, accounting for 43% of the market.
“The main growth driver is brand recall… We have become an alternative to high-end segments. Many are upgrading from other brands, and existing OnePlus users are also upgrading Agarwal said. He added that the dual product strategy also helps the brand attract new users.
OnePlus has two smartphones, the OnePlus 7 and 7 Pro, during the Diwali promotion compared to last year. It also launched the latest in September.Smartphone 7T to further drive market sales.
“Compared with last year, we achieved sales targets ahead of this year. Now, our focus is on expanding offline and service centers,” Agarwal said. However, he did not announce the sales target for 2019.
OnePlus said it expects 30% of mobile phone sales to come from offline channels next year, and the company has begun aggressively expanding offline to further drive growth. In the third quarter, the Chinese mobile phone brand also consolidated its leading position in the high-end market, accounting for 35% of the market.
According to Counterpoint, Samsung and Apple ranked 23% and 22% in the third quarter after OnePlus.
Agarwal said that the next phase of growth will be driven by the expansion of offline channels beginning in the third quarter. At present, One Plus currently has 2,000 offline contact points, mainly large retail stores that cooperate with 10 retail chains, and its own exclusive experience store.
“We are investing in offline expansion and are building our own offline stores. We hope to have 30 stores in a short period of time, and we currently have only 20. Our goal is to open 100 stores… …the offline market is a new opportunity for us,” Agarwal said. He added that by the end of 2020, OnePlus will have 5,000 offline touch points in 50 cities.
“Our goal is to expand offline share. Online is still the main sales channel, but next year, offline will contribute about 30-40% of sales.”
On September 27th, OnePlus launched eight flash stores in cities such as Mumbai, Bangalore, New Delhi, Pune, Hyderabad, Chennai, Ahmedabad and Kolkata. The company said in a media statement that these flash stores can support sales and cause a sensation before the release of its latest smartphone.
OnePlus says that since its inception, the Flash Store has become part of OnePlus’s cultural output and has become synonymous with the brand in India. One plus 7 series flash shop has an amazing response, a large number of users line up to buy their latest flagship products.
Agarwal said that aggressive entry into the offline channel will help OnePlus maintain growth in the fourth quarter, and next year will see even greater impact. “No.The fourth quarter is usually a slower (moving) quarter, but we will keep growing due to offline expansion… We also plan to hold promotions.
OnePlus also plans to open its largest experience center in Hyderabad, covering an area of 16,000 square feet. In addition, OnePlus has recently entered the smart TV market and is currently exploring other Internet of Things (IoT) categories in the Indian market.
realme invests 3 billion rupees, local manufacturing capacity expansion
In the face of the BBK brothers, the realme brand that was announced last year was not unwilling.
According to Indian media reports, the Shenzhen-based Chinese smartphone manufacturer maintained its position as the top brand of Flipkart during the holiday promotion. Realme said in a statement that the brand sold more than 2.2 million realme smartphones during the holiday season, including more than 1 million smartphones, which were sold within one day of the holiday season.
“During Flipkart’s BBD promotion, the customer’s response made us overwhelmed.” Realme India CEO Madhav Sheth said: “We are very pleased to see that customers choose our products because of the quality we provide.” The brand claims that in addition to offering a discount of Rs. 3 billion (approximately RMB 300 million) during the promotion period, the brand will continue to offer the lowest price for smartphones such as realme C2, realme 5 and realme 3 Pro, including a value of Rs 1,000. A discount of RMB 100).
The company also offers free EMI to all buyers and offers a rebate of Rs. 500 (approximately RMB 50) for trade-in.
realme is confident in quality and customer satisfaction. Buying realme smartphones on Flipkart can buy mobile phone insurance at a price of just 1 rupee (about 0.1 yuan). In addition, Realme offers a 2-year warranty on all smartphones purchased on realme.com during the promotion period.
In fact, according to the global smartphone industry report released by market analysts Counterpoint on October 28th in the third quarter of 2019, as a smartphone brand established only one and a half years ago, realme shipments have been from 2018. 47 in the third quarter rose to the seventh place in the world.
In addition to entering the domestic market, and launching a round of price-performance war with friends, realme has never dared to slack off in India.
In September this year, realme announced that it will invest 3 billion rupees (about 300 million yuan) to build 8 surface mount technology (SMT) production lines to increase production capacity.
Real India CEO Madhav Sheth said the new investment created more jobs for OPPO’s Noida plant. “We have created 6,500 direct jobs at the Noida facility.”
With the latest investment, realme has increased its production capacity to 3.6 million units per month. Today, 50% of the brand’s parts are sourced locally.
Sheth said that in the past year, more than 10 component partners have established factories in India, and more partners are planning their factories.
Sheth said that relame will become the number one online mobile phone maker for Diwali and plans to enter the top three in the Indian market this year. Ralem has sold 11 million mobile phones this year. “Our goal is to reach 15-18 million units by the end of 2019.”
Sheth said that mobile phone sales will not slow down during the holiday season, but he warned that the entire market may be stagnant compared to last year, “the total cake this year has not increased.”
In addition, realme is actively expanding its offline business, with plans to cover 180 cities this year, expanding from 7,000 stores to 20,000 stores.
“The current offline channel accounts for 30% of overall sales, and we expect it to grow to 50% by 2020,” Sheth said. Realme’s offline sales increased 300% during the June-August period.
He claims that realme has been the number one brand on Flipkart for the past few months. Flipkart is the exclusive online partner of realme.
At the same time, realme has begun to pay more attention to the accessories business. In addition to universal accessories such as chargers and data cables, Realme also launched earplugs, mobile power supplies, bags and t-shirts.
“We will continue to explore more categories,” Sheth said.