In the past year, the familiar and unfamiliar name of Coolpad has once again returned to the public eye.
Since the beginning of 2021, the veteran mobile phone manufacturer that has disappeared in the domestic mobile phone market for five years has made frequent moves, releasing new mobile phones, launching financing plans, and announcing the addition of 4 executives with Millet backgrounds. Coolpad CEO Chen Jiajun claimed that Coolpad should "return to the first echelon within three years."
Founded in the 1990s, this mobile phone brand has been among the first-line mobile phone brands in China and has many highlight moments. In 2008, it won the second prize of the National Science and Technology Progress Award in 2007 with its self-developed dual-SIM dual-standby technology, and in 2014, it won the first place in the market share of H1 global TD mode 4G mobile phones. Since then, Coolpad has turned overseas and taken the lead in entering the communication markets such as Europe, the United States and Japan.
However, it is such a "light of domestic goods" with many dazzling awards and achievements, but after being affected by the rupture of LeTV's capital chain, it gradually disappeared in China. Public data shows that from 2016 to 2018, Coolpad's cumulative loss in three years reached HK$7.46 billion. It was not until Chen Jiajun took over in 2019 that Coolpad ended three consecutive years of losses and achieved profitability.
From having been in the domestic mobile phone market, to withdrawing from the overseas market, and recently returning to become a "familiar stranger", what has Coolpad experienced? This return to the table, where will the executive team with real estate and Xiaomi background lead Coolpad?
"Elite soldiers": the transformation of the second generation of post-90s real estate and xiaomi former executives
Coolpad's return began with an equity deal four years ago. On January 4, 2018, affected by the rupture of LeEco's capital chain, LeEco transferred its 17.83% cool equity to Weiri Venture Capital, which is controlled by Chan Ka Chun, for a transaction price of HK$808 million. In January 2019, Chen Jiajun was appointed as an executive director and president of Coolpad.
The young post-90s helmsman is from the Kingkey Group and is the second son of Chen Hua, the founder of the Kingkey Group. According to public information, Chen Jiajun was born in 1992, is a veritable "post-90s" and holds a master's degree in finance from the University of Southern California. He was the President of Shenzhen Kingkey Baina Commercial Management Co., Ltd. and is currently an Executive Director, Chairman of the Board and Chief Executive Officer of Coolpad Group, as well as a Director of Kingkey Zhinong.
After Chen Jiajun took over, in early 2020, Coolpad began to return to the domestic market. During the same period, Coolpad's management team gradually built up. According to the appointment announcement released by Coolpad, Qin Tao served as the senior vice president of Coolpad Group and the chief of staff of the group staff, and he also has a highly concerned identity, that is, he was the general manager of Xiaomi's channel innovation department. In addition, the group's vice presidents are Hu Xing, Li Yujing and Sima Yunrui. These four people all worked in Xiaomi before joining Coolpad, and Li Yujing has the title of "Father of Little King Kong" in the circle.
The second generation of post-90s real estate has joined hands with four "elite soldiers" with millet backgrounds, a young team with an average age of only about 35 years old, which has revitalized Coolpad. Coolpad related people told Nandu reporter that the three words of professionalism, innovation and vitality can describe this new team very well. "The difference between the new cool and the old cool is first of all the new team, but also the blessing of new capital and the formulation of new strategies. ”
Chen Jiajun
Senior Management Team (from left): Hu Xing (Vice President of the Group and President of Sales and Service Center), Li Yujing (Vice President of the Group and President of the Product Hardware Center), Chen Jiajun (Chairman and CEO), Qin Tao (Senior Vice President of the Group), Sima Yunrui (Vice President of the Group and President of the Internet Center)
"The meaning of drunkenness": real estate transformation of the mobile phone market, or intended to cool the consumer electronics brand
However, young teams with new strategies also mean they will face unprecedented challenges. At the same time, the transformation of the mobile phone market with a real estate background has also attracted a lot of speculation from the outside world. According to public information, Coolpad holds many plots of land, including Shenzhen Nanshan High-tech Industrial Park Coolpad Information Port plot, Dongguan Songshan Lake plot, Xi'an Chang'an Industrial Park plot, Heyuan Construction Agricultural Ecological Park and other projects. Some insiders speculate that the real estate background to take over cool may also be coveting the plots in its hands.
Sun Yanbiao, chairman of Rising Sun Big Data, analyzed that the industrial parks and plots in the hands of Coolpad were very good resources at the beginning of Chen Jiajun's entry into Coolpad. "But now industrial real estate is not easy to do, relatively speaking, mobile phone business has more possibilities." With the development of 5G and the advent of the era of the Internet of Things, mobile phones will become the hyperterminal terminal of the Internet of Everything, the first entrance. In Sun Yanbiao's view, the original cool team has basically come out, and now the new team restarts the mobile phone business in the domestic market, looking at the development opportunities in the era of the Internet of Things.
However, Sun Yanbiao also pointed out that in the current era of 5G Internet of Everything, Chen Jiajun reorganized Coolpad, or intended to cool the consumer electronics brand. "The fact that the mobile phone business is more difficult does not mean that other consumer electronics businesses cannot do it." In the era of the Internet of Things, Coolpad can also do a lot of epitaxial business, such as cameras, smart speakers, smart wearables and other products, these products are not high demands on the brand. Now the demand for these products in the construction of new rural areas is also very large, which can be said to be some new opportunities. ”
Coolpad also said that the new management team, capital and strategy, as well as rural revitalization, new infrastructure, digitalization and other opportunities, have created opportunities for Coolpad.
"Eat a long and a wise": change the channel model, the main attack on the sinking market
One of Coolpad's differentiated strategies is to adopt the service station channel model. Different from the agency and distribution mode of traditional mobile phone offline channels, Coolpad chose the "rural encirclement of the city" playing method, dividing the country into more than 30,000 grids, managing service sites through digital systems, establishing a direct supply model, and the "webmaster" is responsible for managing the sales of Coolpad products in the entire area. In addition to enjoying the commission of mobile phone sales, the "webmaster" can also receive Internet service revenue and MAU incentives.
Coolpad introduced that unlike the traditional inefficient model of managing channels through account managers, all service stations are managed through big data systems, with higher efficiency and lower cost. In addition to obtaining hardware revenue from product sales, service station webmasters in each region can also enjoy internet revenue sharing and policy benefits in the region.
The coolpad's efforts in the channel model may be related to the "thunder" it has stepped on. According to the analysis of industry insiders who have worked in Coolpad for eight years, behind coolpad's encounter with walls, the first is the dealer who does not have deep bundling. In the sinking market, compared with OPPO, vivo and other mobile phone brands with strong competitiveness, they participate in each other with core dealers, deeply bundled, and protect the interests of dealers, but Coolpad does not have such conditions.
Secondly, the problem of channeling goods is also one of the factors, "If the price of goods in the hands of a distributor in Hunan is lower than that in Hubei, when he takes the goods to Hubei to sell, it obviously has a price advantage, which means that the local dealers in Hubei will reduce the price." After the price cut, the dealer's commission became less, and more and more people had to abandon Coolpad to other mobile phone brands, which eventually led to Coolpad's inventory backlog. ”
Why did Coolpad fail miserably on the channel model? When it comes to the reasons behind it, it is necessary to mention the background of its deep binding with operators. In the era of 3G mobile phones, Coolpad has cooperated with operators such as China Unicom and benefited from carrier subsidy policies such as "charging the phone bill to send the mobile phone". Canalys report shows that in April 2013, Coolpad's 3G market share was 11.5%, ranking second, successfully surpassing Lenovo, Huawei and ZTE, second only to Samsung.
Cooperation with operators has made Coolpad a fish, but the good times are not long, and Coolpad's fate suddenly takes a sharp turn. In 2014, due to the SASAC's requirement that the three major operators lower marketing and subsidy costs to stabilize profits, operators terminated subsidies for Coolpad mobile phones, and the proportion of operator channels in smartphones gradually decreased. Official data show that in 2014, the number of cool shipments was 40 million units, down nearly 50%, and the domestic market rank fell to sixth.
The above-mentioned industry insiders believe that it is precisely because of its channel model that has been deeply bound to operators, Coolpad does not have the experience of entering the social open channel of the sinking market, making Coolpad fail miserably in the transformation.
Therefore, the innovative channel model brought about by the return to the domestic market, Coolpad is "eating a long and a wisdom", and has learned the lessons of the past. As far as current practice is concerned, this innovative model has also achieved initial success. Since November 2020, in less than a year, Coolpad has raised more than 2.1 billion yuan, and said that these funds will be used for the construction of Coolpad's mobile phone channels in China and the sale of products. According to the data provided by Coolpad to Nandu reporters, as of December last year, more than 3,400 Coolpad authorized service stations have been built across the country.
"Hit low with high": Can Coolpad get a piece of the pie by seizing the low-end market with high cost performance?
After returning to the domestic market, in terms of products, Coolpad has brought two new machines, innovated and upgraded in hardware and software, and also received praise in the domestic market.
The first is may 25, 2021, the first product released in China after its return, COOL20, the price sinks, the price starts from 699. The coolpad's self-developed COOLOS system on this new machine is one of the highlights. Public information shows that this self-developed system can be optimized for the hardware configuration of COOL20.
On December 1, 2021, Coolpad released the Coolpad COOL 20 Pro, which once again innovated and upgraded its system and hardware and software. 6GB+128GB is priced at 1799 yuan; 8GB+128GB is priced at 2099 yuan. Coolpad CEO Chen Jiajun said at the press conference that Coolpad's return is to break the current industry's widespread "user bias", "product bias" and "channel bias", reproduce the fairness of the industry, and pay tribute to the strivers with better products and services.
In fact, Coolpad's way of playing is to "play high and low" and seize the low-end market with high cost performance. Specifically, in the self-developed COOLOS, Coolpad used the EROFS file system of the competitor flagship machine for the first time in the thousand yuan machine, so that the 699 yuan product can also have a smoother experience.
Coolpad believes that when friends are pursuing the so-called "high-end", it is the most important thing to explore and meet the real needs of users. To this end, Coolpad will extend the user replacement cycle to more than 2 years, and take the lead in the industry to propose a "90-day replacement 2-year warranty", which has more than doubled the industry standard; for anti-fraud to launch account insurance, as long as the use of Coolpad mobile phone, in the safe mode of telephone SMS fraud, once the case is filed, Coolpad can give priority to pay up to 50,000 yuan.
These are Coolpad's differentiated ways of playing.
In Sun Yanbiao's view, the current domestic mobile phone manufacturers "Mi Rong OV" are heavily deploying mid-range machines in the 2,000 yuan to 4,000 yuan gear, and are also sprinting the high-end machine market vacated by Huawei, but everyone in the low-end machine market has some concessions. "So at this time, Coolpad uses high-end configurations to sprint the low-end market, and it is still cost-effective."
Although Chen Jiajun proposed to "return to the first echelon within three years", there is still a big gap compared with "Mi Rong OV". Sun Yanbiao believes that the current mobile phone market is no longer just relying on selling mobile phone hardware to make money, but through the mobile phone, an important channel resource and terminal, to provide content and other services.
Taking Xiaomi as an example, its Q3 financial report shows that its Internet business revenue soared by 85.5% year-on-year to 4.7 billion yuan. Among them, advertising revenue increased by 109.8% year-on-year; MIUI's monthly active users reached 224 million, an increase of 43.4% year-on-year, and the average revenue per user (ARPU) in the third quarter was 21.1 yuan, an increase of 29.4% year-on-year; at the same time, based on Xiaomi's development in overseas markets in the past two years, its overseas Internet service business also began to monetize.
Beyond the mobile phone hardware, the first echelon of mobile phone manufacturers have begun to make ecological money, which is the competitive challenge faced by new players such as Coolpad.
"Wait a few decades": The deep-seated reason behind the return is industry opportunities
In fact, not only cool, in the past year, more and more once frustrated mobile phone brands have moved frequently and are ready to return to the table. In August 2021, TCL announced the return of its sub-brand Thunderbird Technology; in January 2022, Meizu announced at the first press conference of this year that its three brands lipro, PANDAER, and mblu (charm blue) had received product updates; Lenovo, ZTE and other brand mobile phones also released the signal of new product warm-up.
The deep reason behind this is that after Huawei was forced to withdraw, the market share of the head brand decreased, and the living space of small and medium-sized mobile phone brands was further expanded. According to public data, the top 5 in China's smartphone market in 2021 are vivo, OPPO, Apple, Xiaomi and Glory, with a combined market share of 84%. Huawei's market share is only 10%, down 68% from last year.
Sun Yanbiao also analyzed that before Huawei was suppressed and sanctioned by the United States, its mobile phone product line covered from thousands of yuan machines to high-end models, and now the vacated market space is an opportunity for mobile phone manufacturers. At the same time, the current market opportunities are also very good, and Coolpad is also waiting for opportunities.
Coolpad relevant parties told Nandu reporters that the choice to return at this time is precisely because the industry has a rare opportunity of "once in decades", which is mainly manifested in three aspects:
First, the opportunity to catch up brought about by the slowdown in hardware iteration. At present, the iteration of hardware in the mobile phone industry has slowed down, and it is difficult to make a difference by relying solely on hardware. In this context, new brands have the opportunity to catch up with the top brands in terms of hardware, systems and product experience.
The second is the low-risk advantage in the rise of supply chain risks. In recent years, China's mobile phone market has continued to shrink, and demand-side growth has been less than expected. The huge difference between supply and demand increases the uncertainty of the supply chain. In this context, Coolpad can go light and have more room for adjustment.
The third is the channel change opportunity brought about by the shrinking stock, that is, coolpad's innovative digital channel model. "This model solves the problem of channeling goods that has plagued the industry for decades, and store managers no longer worry about goods from other regions or e-commerce running to their own areas."
Coolpad related parties said that its R & D personnel accounted for more than 70%, and the research and development of its products has three key directions: more in-depth application of AI in mobile phones, new materials and new processes.
Written by: Nandu reporter Yan Zhaoxin Cheng Yang