Coolpad "resurrection": the main attack on the sinking market, pulling the "father of little King Kong" is still difficult to do

Image source @ Visual China

Wen 丨 Shi Tianhao

Speaking of Coolpad, it is familiar and strange.

What is familiar is that the former Coolpad, as one of the four kings of the "China Cool Union", has unlimited scenery. Since Coolpad officially entered the mobile phone market in 2003, it has launched China's first CDMA1X color screen resistive touch screen mobile phone, followed by the launch of the world's first CDMA/GSM intelligent dual-mode dual-mode dual standby mobile phone in 2005. Around 2012, it can be described as the highlight of Coolpad, not only ranking among the top five in the world, but also increasing shipments, and the former Coolpad is unsurpassed.

What is strange is that in the mobile phone market in recent years, the coolpad that once played a role has gradually been overtaken by xiaomi, OPPO, vivo and other latecomers. According to the data of "China Unicom 5G Terminal Development Index and Performance Report", 5G mobile phone domestic brands occupy the absolute market, huawei, vivo, OPPO, millet, glory plus Apple mobile phone brands account for more than 97%. So far, the figure of Coolpad has been rarely seen, so that it has gradually been forgotten.

However, the cool people who were once extremely popular are doomed to be unwilling. In May this year, Coolpad returned to the market with the new coin COOL 20, and then released the COOL 20 Pro on December 1, and Coolpad chairman Chen Jiajun also said that "in three years to return to the first echelon of domestic mobile phone brands".

However, the mobile phone has long changed hands, can the bold words of coolpad be realized?

Coolpad is back, but the market is gone

An important battle in the history of Coolpad has begun, of course, in this "battle" Coolpad can also be said to be fully prepared.

In terms of financing, Coolpad introduced new capital; on October 4, Coolpad Group announced that it had signed a share subscription agreement of HK$833 million, which was led by SIG Haina Asia Venture Capital Fund (hereinafter referred to as SIG), and followed by institutions and individuals such as Honghui Investment Co., Ltd. It is understood that SIG is a world-leading quantitative transaction financial company, since entering the Chinese market in 2005, it has invested in more than 350 companies such as ByteDance, Flash, WM Motor, Himalaya, etc., with a total investment of more than 3.5 billion US dollars.

It can be said that the cooperation between Coolpad and SIG has brought far more than just financial support, but also provided an innovative strategic focus for its future development. It should be known that SIG, as a global investment company, will help promote the international expansion of Coolpad Group's smartphone business. In addition, SIG and its affiliates are also involved in investing in technology and technology enabling companies, which will also bring synergies to Coolpad in the development of operating systems.

In terms of teams, Coolpad re-established the operation management team; in the senior management appointment announcement issued by Coolpad Group, it was announced that from October 8, 2021, Qin Tao was appointed as senior vice president of the group, and Hu Xing, Li Yujing and Sima Yunrui were appointed as vice presidents of the group. It is worth noting that from the resumes of these four, before joining Coolpad, they all had a working background in Xiaomi.

Among them, Li Yujing, who is the vice president of the group, has served as the product director of the mobile phone department of Xiaomi Group and the director of the group staff department, responsible for the Redmi mobile phone product line planning, hardware product system strategic planning and other businesses. It is reported that the Redmi7 series and Redmi8 series created by it have been the world's best-selling explosive models, with a cumulative global shipment of more than 100 million, which can be called the "father of Little King Kong" of Redmi.

From the above point of view, Coolpad, which has financing and a strong team, should have been able to smoothly "kill" into the mobile phone market, but it backfired, in fact, in the past few years since Coolpad withdrew from the jianghu, the mobile phone market has long changed.

As mentioned above, the mobile phone market has been divided by Apple, Huawei, millet, OPPO, vivo, glory and other brands, according to the IDC mobile phone quarterly tracking report, compared with the first half of 2021, vivo, OPPO, glory, millet, Apple and other head manufacturers Share gap continues to close, the top five manufacturers market share has exceeded double digits.

Not only that, today's smart phone market has transitioned from an incremental era to a stock era, and China's mobile phone shipments are also declining. According to IDC data, the overall shipment of the domestic mobile phone market in 2019 was 389 million units, down 6.2% year-on-year; in November 2020, the overall shipment of the domestic mobile phone market was 29.584 million units, down 15.1% year-on-year; From January to November 2020, the overall shipment volume of the domestic mobile phone market totaled 281 million units, down 21.5% year-on-year.

As can be seen from IDC's data, the Matthew effect in China's smartphone market is becoming increasingly obvious, and the development trend of Hengqiang, a strong person in the mobile phone market, is becoming more and more irreversible. It can be seen that even if Coolpad gets financing and has the blessing of an experienced team, it is extremely difficult to achieve the first echelon of returning to domestic mobile phone brands within three years in the market.

The sinking market also does not have a place for coolers

In fact, Coolpad also has a clear understanding of the current situation of the smartphone market, so Coolpad chooses the way of playing that surrounds the city in the countryside, starting with the sinking market and gradually expanding the market.

Since Coolpad announced its return to the domestic smartphone market in May this year, it has launched a Coolpad COOL 20 mobile phone priced at only 699 yuan, which is also the first product since Coolpad announced its return. Then in early December this year, Coolpad released its second smartphone - Coolpad COOL 20 Pro, according to reports, the phone is equipped with MediaTek Tianji 900 6nm 5G chip, priced at 1799 yuan.

It is not difficult to see from the price of the two mobile phones that Coolpad is currently positioned in the middle and low end, and its main goal is to conquer the sinking market. In addition, in the construction of channels, Coolpad has also reformed offline channels, which is different from the distribution channel model in the industry, but adopts a digital channel management model.

According to Chen Jiajun, chairman of Coolpad, since the Chinese smartphone market entered the stock stage, the mode of offline stores relying on hardware sales to make profits is difficult to sustain, in order to maintain profit growth, it began to increase the threshold of agent operation and other behaviors, so that manufacturers and channels, online and offline formed a tense antagonistic relationship, and then the entire industry fell into a "zero-sum game" pattern, but in the digital channel management model, Coolpad will be the smart phone market between the channels of the "zero-sum game" pattern to break, So that offline channels no longer worry about being robbed of business by online stores.

Whether it is from the release of Coolpad's new machine or Coolpad's reform of the channel, the main focus of Coolpad at this stage is concentrated in the sinking market.

A set of data is enough to show that the current sinking market is indeed a blue ocean full of opportunities. According to the "2020 Annual 5G Mobile Phone Report" shows that the sinking market will become a new growth point in the future mobile phone market, by the end of 2020, although the mainstream population of 5G mobile phones is mainly concentrated in first- and second-tier cities, the proportion of people in third- and fourth-tier cities has increased compared with the middle of 2020, reaching 19.0% and 27.5% respectively; with the further improvement of 5G network coverage in China, the sinking market will also become a new battlefield for 5G mobile phones.

However, a fact that cannot be ignored is that the huge population base in the sinking market is attracting all walks of life to enter, and judging from the general environment of the sinking market of mobile phones, it will not be conducive to coolpad's new journey.

In the sinking market, OPPO and vivo have strong market competitiveness. When it comes to OPPO and vivo, although the name may not be as loud as Huawei, they are really a force that cannot be ignored in the sinking market. In some townships, it is not surprising that a number of OPPO and vivo stores have been opened in a street, and even some rural recharge business halls will hang OPPO and vivo signboards.

This also makes them have an absolute market share in the sinking market, market research institute Counterpoint released the 11th week of 2021 market share data shows that Vivo's market share in China reached 24%, becoming the first in the list; followed by OPPO, with a market share of 21%.

It can be seen that the sinking market has also become their most core competitive advantage.

At the same time, Xiaomi and Glory also have a keen insight into the mobile phone market, and brands such as Xiaomi and Glory have also begun to expand their stores and start a sinking journey. Earlier, Xiaomi executive Lu Weibing said in an interview with the media that the number of Xiaomi Home stores exceeded 10,000, accounting for about 7% to 8% of the offline market share.

In addition, according to relevant data, Xiaomi Home has sunk to more than 2,200 counties across the country, and the county market coverage rate has increased rapidly from 30% last year to 80%; Glory is also not far behind, as of the end of August 2021, the number of Glory experience stores has increased by 68% compared with the beginning of 2021, and more than 300 Glory Experience Stores have opened simultaneously in the domestic market on October 1 alone.

At present, the current situation of Coolpad in the sinking market can be said to be OPPO and vivo, which have been deeply cultivated in the sinking market for many years and have established an industry moat; after that, there are tigers looking at each other, intending to divide the millet and glory of the sinking market cake. Under siege, Coolpad's future prospects in the sinking market are not optimistic.

How did the former king win?

Reviewing the rise and fall of Coolpad can be seen that the reason why it will eventually decline is inseparable from its excessive dependence on operator channels and the wrong decisions of founders.

Coolpad is rooted in operators and trapped in operators; in the era of 3G mobile phones, it can be described as the peak of Coolpad. At this time, Coolpad used its deep binding with operators to benefit from operator subsidy policies such as "charging the phone bill to send mobile phones", and by 2012, Coolpad had ranked among the top in China's 3G mobile phone rankings. Canalys report shows that in 2012, Coolpad ranked third in China's smartphones; In April 2013, Coolpad's 3G market share was 11.5%, ranking second, successfully surpassing Lenovo, Huawei, and ZTE, second only to Samsung.

By 2014, due to the SASAC's requirement that the three major operators lower marketing and subsidy costs to stabilize profits, operators suddenly terminated subsidies for Coolpad mobile phones, after which more and more consumers began to gradually tilt towards online e-commerce platforms, and the proportion of operator channels in smart phones also shrank, which is undoubtedly like a blow to Coolpad, which relies heavily on operators, and coolpad has gradually declined.

Official data shows that in 2014, the number of cool shipments was 40 million units, down nearly 50%, and the domestic market rank fell to sixth.

The founder's wrong decision made Coolpad in prison; the fall of one era heralded the rise of the next era, and Xiaomi was the absolute dark horse of the Chinese Cool Union era. At that time, Xiaomi took MIUI as a breakthrough to enter the field of mobile phone hardware, and since the release of xiaomi's first generation of mobile phones in 2011, Xiaomi, which is mainly cost-effective, is widely favored by young consumer groups.

The popularity of Xiaomi has also made Coolpad realize that the operator channel is no longer a good medicine, so it has set its sights on the e-commerce channel. Around 2015, Coolpad has cooperated with 360 and LeTV, intending to use the ability of Internet companies to open up the road of Coolpad's Internet mobile phones. But these two times did not turn cool faction around, but also put coolpad in prison.

360, which cooperated first, sold the Dashen series mobile phones launched by the cooperation at a huge discount, resulting in a huge loss for Coolpad. However, the disaster is not alone, just when Coolpad and See Music as a life-saving straw, LeEco has another capital rupture crisis, selling all the Coolpad shares it holds, and Coolpad has begun to decline in an all-round way. According to its 2016 financial report data, in 2016, Coolpad mobile phone shipments were less than 15 million units, the company's loss was as high as 3.5 billion yuan, and the company's market value also evaporated by more than half.

Not only that, Coolpad's vague brand positioning, missing the best transformation opportunities, product lines are too chaotic, etc., this pile is a piece of straw that crushes the camel. Today's cool pie is more like a typical negative teaching material in the mobile phone industry, which can't help but be lamented.

After talking about the history of cool school decline, let's look at cool school's bold words of "returning to the first echelon of china within three years". Although Huawei is currently constrained and has vacated a part of its market share in the mobile phone market, in terms of the current mobile phone market, Coolpad's ability to share food is still insufficient.

Whether it is the introduction of new investment, the formation of a new team, or the sinking of the market, all the actions made by Coolpad are originally intended to seize the market share of smart phones. However, mobile phone manufacturers with strong teams and sufficient funds abound, and Coolpad also has no advantage over other manufacturers in the sinking market.

Coolpad, which has disappeared for many years, is now difficult to form a brand influence. For the current coolpad, whether it can win the first echelon is not important, how to survive is a more pragmatic small goal.