Introduction to the stone: For a long time, OPPO and vivo companies have maintained a highly convergent strategy. However, in the new competitive environment, the two are forced to rethink their competitive strategies, and thus begin to diverge greatly.
Ordinary | author
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There is a unique phenomenon in China's smartphone industry, that is, two companies have maintained similar product strategies, similar marketing strategies, similar channel strategies, similar corporate cultures, and even similar market shares for a long time, and their headquarters are located in Chang'an Town, Dongguan City, Guangdong Province, both with a brand name composed of English letters.
These two companies are OPPO and vivo, referred to as OV.
Because the LOGOs of the two are green and blue, they are also known as blue-green brothers in the industry. OPPO is highly similar to vivo, it has a historical origin, and their leaders Chen Mingyong and Shen Wei are duan Yongping, the founders of BBK.
Shen Wei
In 1995, Duan Yongping, who left Xiaobawang, founded BBK Electronics Company in Dongguan. There are 6 people who followed him from Xiaobawang to start a business, including Chen Mingyong, the head of OPPO, and Shen Wei, the head of vivo.
In 1999, Duan Yongping transformed the three major businesses of education, audio-visual and communication under BBK Electronics into "BBK Education Electronics", "BBK Audiovisual Electronics" and "BBK Communication Technology", three companies with independent equity and no subordinate relationship with each other. The three companies are the predecessors of today's Little Genius, OPPO and Vivo. Among them, BBK Audiovisual Electronics is responsible for Chen Mingyong, BBK Communication Technology is responsible for Shen Wei, and BBK Education Electronics Company is responsible for Jin Zhijiang.
According to the division of labor of the above three companies, Shen Wei, who focuses on the field of telephone communication, took the lead in entering the mobile phone market in 2004. In the early days of the mobile phone industry, BBK communication did not develop smoothly, and a very important reason is that the image of "BBK" as a home appliance brand is deeply rooted in the minds of consumers, and it is difficult for everyone to accept the mobile phone products launched by it. As a result, BBK Communication Technology Co., Ltd. launched a new brand vivo on June 7, 2010, focusing on mobile phone products.
Chen Mingyong
The BBK Audiovisual Company led by Chen Mingyong is mainly VCD, DVD, MP3 and MP4 and other products, and in order to get rid of the influence of the BBK brand, Chen Mingyong also launched a new brand OPPO. However, what is not satisfactory is that OPPO's main VCD, DVD, MP3 and MP4 and other businesses are declining due to the shrinking of the market, and Chen Mingyong was forced to enter the TV business, but because the core components of the LCD panel are subject to overseas manufacturers, the prospects are also bleak. Stumbling into 2006, Chen Mingyong decided to enter the rising mobile phone market.
Chen Mingyong told his mentor Duan Yongping of his idea of entering the mobile phone industry, and Duan Yongping said, "Although you have no subordinate relationship with BBK Communications Company now, after all, you were brothers before, and if the other party does not oppose, I will be fine." The mobile phone market is very large, can accommodate many enterprises, Shen Wei is naturally not afraid of one more OPPO, so he did not raise objections. In this way, Chen Mingyong began to lead OPPO into the mobile phone market, and launched OPPO's first mobile phone - OPPO A103 in May 2008.
Initially, the development of OPPO and vivo was tepid, until the advent of the smart phone era around 2010, China's smart phone industry began to reshuffle, OPPO and vivo ushered in a turnaround.
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The earliest successful player in China's smartphone industry is Xiaomi, which has achieved unprecedented success with a series of combinations such as extreme cost performance, software and hardware integration, social marketing and online sales.
In the face of the millet model, many mobile phone companies in China have fallen into the plagiarism and imitation of the online sales of the millet model, which has led to the online market becoming a red sea of low-price competition in the future, and many mobile phone companies are also dying out. What is different is that OPPO and vivo do the opposite, almost completely abandoning the online market of smartphones and focusing on offline channels.
On the one hand, this is because unlike Xiaomi, which has no offline channel foundation, OPPO and vivo have established a perfect offline sales system in history, and if the two are online at that time, it will have a huge impact on the inherent offline channels.
On the other hand, OPPO and vivo also keenly see the strategic value of offline channels that are still growing at a high speed. Although online sales can achieve a part of mobile phone sales, most mobile phone transactions are completed offline, and the sales stability of offline channels is much better than that of online channels. Because as long as there are stable agents, retailers and store promotion personnel offline, sustainable and stable sales can be guaranteed, and the competition threshold for online sales is very low, as long as competitors invest more traffic advertising and lower product prices, sales will be greatly affected.
In addition to deeply cultivating the offline market, due to the early influence of Duan Yongping's thinking in products, brands, marketing and channels, both of them invariably chose target customers based on young people, focusing on differentiated product strategies such as photography and music, large-scale variety marketing titles, and star spokespersons who followed the trend. The combination of these factors finally allowed OV to defeat a number of strong enemies such as Huawei, Glory, Xiaomi and Apple in 2016, and once ranked in the top two of China's smartphone brand sales rankings.
However, around 2017, on the one hand, as Huawei, Xiaomi and other competitors made up for the shortcomings of offline channels, on the other hand, Huawei's technological leadership and Xiaomi's ecological product advantages were fully reflected, OPPO and vivo began to face unprecedented competitive pressure, and there was a large-scale wave of store closures and a sharp decline in sales.
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For a long time, Chen Mingyong and Shen Wei have always adhered to some of the business thinking inherited by Duan Yongping in the BBK era, which is very effective in the stage of the two as industry catch-ups. But when both enter the center of the stage of China's mobile phone industry, becoming defenders of market share, they began to fail in the face of powerful competitors such as Huawei, Xiaomi and Apple.
The sudden change in the market competition environment has caused a lot of panic within the OV, and has also brought Greater touches to Chen Mingyong and Shen Wei, prompting them to have to redesign their competitive strategies, otherwise they can only be passively beaten. In this process, oppo and vivo companies began to diverge greatly in strategy.
Among them, OPPO founder Chen Mingyong showed a stronger sense of enterprising, on the one hand, he accelerated the pace of OPPO's product diversification, on the other hand, increased investment in core technology areas related to the upstream supply chain.
For example, in the field of new products, OPPO has successively launched a number of new categories such as smart TVs, CPEs, smart watches, smart bracelets, smart headphones and AR glasses. In addition, news about OPPO's preparations to enter the field of new energy vehicles has also come repeatedly.
Just recently, OPPO also publicly announced that it will release its first tablet at the upcoming new product launch conference on February 24. Mobile phones, TVs, bracelets, tablets, AR glasses..., from this series of product lists, it can be seen that OPPO firmly chooses the intelligent hardware ecological road of benchmarking Apple, Xiaomi and Huawei.
In the field of technology research and development, OPPO also proposed the "3+N+X" scientific and technological leap strategy, focusing on hardware basic technology, software engineering technology and services to reconstruct OPPO's scientific and technological capability system. Chen Mingyong said, "A technology company must solve key problems through key technologies. If there is no underlying core technology, there can be no future; and the flagship product without the underlying core technology is a castle in the air. OPPO must have the belief of grinding a sword for ten years, have the courage to step into the deep water area of research and development, and build the most core underlying hardware technology. ”
Among them, OPPO has taken the self-developed chip as a core technology project with key breakthroughs. At the Future Technology Conference just before the Spring Festival, OPPO released the first self-developed chip, Mariana X, which took three years of research and development, using TSMC's 6-nanometer process. Chen Mingyong said that Mariana X is only a small step for OPPO, and will continue to invest resources in the future, with a team of thousands of people, to engage in self-developed chips on the ground. In addition, OPPO also announced a research and development plan of 50 billion yuan in the next three years, focusing on cutting-edge technologies such as 5G/6G, artificial intelligence, AR, and big data, as well as the underlying hardware core technology and software engineering and system capabilities.
Whether it is the diversification of products or the breakthrough of key core technologies in the upstream, OPPO's future positioning is a technology company, not just a mobile phone company. Chen Mingyong said. "What awaits us will be a new era of mutual integration of all things with technological leaps, virtual and real integration, and global intelligence, and a future with more possibilities and even uncertainties."
Matching the adjustment of the strategy, OPPO has also made a major adjustment to the organization. On the one hand, the OnePlus brand and one plus founder Liu Zuohu will be recalled back to the headquarters, on the other hand, the Realme brand, which previously focused on overseas markets, will also be brought back to the Chinese market, with the three brands of OPPO, OnePlus and Trueme, forming a joint operation trend of the legion.
Compared with the positive and enterprising of OPPO head Chen Mingyong, vivo head Shen Wei is relatively conservative, and its biggest move is to launch an IQOO brand focusing on the online young people's market. In terms of product categories, it is still focused on the core category of smart phones, but it only tentatively involves a small number of peripheral products. Although vivo also said that it will increase the exploration and investment in cutting-edge technologies and basic capabilities, and established the "Vivo Central Research Institute", it is far inferior to OPPO from the perspective of investment.
In addition, at the 2022 annual meeting, Shen Wei highlighted that vivo will write design drive into the company's values, which is enough to see that vivo has design as an important strategy with high hopes. However, the author is not very optimistic about vivo will bet on the design field, because the design ability is currently attached great importance to all smart phone companies, in the current global smart phone industry to present a fairy fight in the competitive environment, vivo is difficult to rely on design-driven to achieve differentiation.
In addition, OPPO has put forward a design-driven strategy many years ago, and formed a good reputation among users, and in the new competitive environment, OPPO has realized that it is difficult to rely solely on design to compete and win, so it has upgraded the brand slogan from Zhimei Design to Zhimei Technology before.
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Whether it is OPPO's quite aggressive strategy or vivo's slightly conservative strategy, the advantages and disadvantages of the strategy ultimately depend on the results of the landing of the two.
However, from the current business results of OPPO and vivo, vivo has not gained a leading edge because it is more focused on the smart phone industry, and OPPO has not fallen behind in the smart phone industry because of diversification.
First of all, from the perspective of global smartphone sales, vivo's sales of 130 million units are nearly 15 million less than OPPO's 145 million units, which is far from Xiaomi's sales of 191 million units. In addition, according to the prediction of third-party agencies, in 2022, OPPO is likely to further widen the leading gap with vivo.
However, vivo has performed well in the Chinese market. For the whole of 2021, it slightly ahead of OPPO's 67 million with sales of 71 million, ranking first in the Chinese market. However, vivo's domestic market leadership has an accidental factor, that is, Huawei's mobile phone, which has already overtaken vivo, has experienced a cliff-like decline due to the loss of chip supply due to US sanctions, which makes vivo extremely lucky to regain a large number of lost ground in the past.
However, according to the data of the fourth quarter of 2021, the future of Vivo in the Chinese market is not optimistic. Because with the separation of Honor from Huawei, it has got rid of the impact of chip supply cuts, recovered rapidly, and has jumped to the second place in the domestic ranking in the fourth quarter, achieving a surpassing of vivo. In addition, Huawei is working hard to solve the problem of chips, once Huawei gets rid of the shackles of chip supply, it will still be the most powerful competitor in the Chinese smartphone market.
Secondly, vivo's ability to precipitate in the strategic pattern and ecological products is lagging behind all competitors in an all-round way. In the past two years, there have been two important trends in the intelligent hardware industry, one is that the user's demand for multi-terminal interconnection is getting stronger, and the other is that it is difficult for intelligent hardware companies with a single product to survive in offline channels, which determines the competition of smart phone companies in the future and will be ecological competition.
Under this general trend, Apple, Samsung, Huawei and Xiaomi have completed the layout of the intelligent hardware ecology, OPPO is also rapidly precipitating capabilities and catching up, while vivo has become the only alternative among mainstream smartphone companies, which will be a huge potential risk.
But the business amorphous technique, although it is only focused on the core category of smart phones vivo, is slightly conservative, but if it can make a new technology and new products that really have no one and can attract users to pay for it, vivo may also become a successful alternative model. The rhythm of OPPO in product diversification is also a bit too aggressive, it is not suitable to balance the force on multiple new categories in a short period of time, and it can give priority to saturating attacks on 1-2 new categories such as smart TVs and smart watches, becoming a leader in the field, and then exerting efforts on new categories.
In any case, we see that OPPO and vivo, which have been adhering to the "dare to be the queen of the world", are changing, which is a happy thing and will be conducive to promoting the overall progress of China's intelligent hardware industry. We will wait and see what the end of the competition in the industry will be in the future.