The following article is from Parity (ID: jioupai)
Author | Zero nine
Edit | encourage
On the evening of February 28, the new wave of domestic mobile phones since the beginning of the year finally ushered in the last recent conference. Once the glory of Huawei's sub-brand, it launched a new generation of products in its Magic series.
Taking this conference as a starting point, looking back at the new wave of domestic mobile phones in the first quarter of 2022, it is not difficult to find that the domestic mobile phone giants of the past have launched sub-brand mobile phones with a lot of voice, and even vaguely have the situation of covering the parent company's own brand.
First OPPO's Realme and OnePlus released the GT2 series and one plus 10 Pro, followed by Vivo's iQOO 9 series, followed by Glory successively launched Magic V and Magic 4; Xiaomi sub-brand Redmi's K50 series debuted, even Meizu was not lonely, announcing the restart of the Charm Blue brand.
At the beginning of the year, just over two months ago, a number of sub-brands released more than 10 new machines, the number far exceeded huawei, millet, OPPO, vivo's own brand new machines, the price has also covered the full price range of 600-10,000 yuan. Sub-brands have become an important battlefield for major domestic mobile phone manufacturers.
The fierce battle of the sub-brands of mobile phone manufacturers has begun again, who can borrow the trend of sub-brands to reach the peak? Taking stock of the past and present of sub-brands, we try to analyze the current domestic mobile phone sub-brand market from the following three issues:
1. Why have domestic mobile phone manufacturers established sub-brands?
2. After conquering the market in the early stage, how is the follow-up development of each sub-brand, and what are the problems?
3. Is the sub-brand really helpful for domestic mobile phones to rush to the high-end? What are the prospects for the future?
Made for value for money
Why do "Huami OV" make sub-brand mobile phones? Looking back at the history of almost all domestic mobile phone sub-brands, it is not difficult to find that their purpose at the beginning of their establishment is quite consistent - to seize cost-effective users and lay the foundation for the parent brand to impact the high-end.
In July 2013, Xiaomi released the first generation of Redmi mobile phones. The mediatek MT6589 quad-core processor, which was generally used by the mobile phone at the price of two thousand yuan at that time, was finally only sold for 799 yuan, which was difficult to have the cost performance of the opponent, which caused unprecedented heated discussion in the mobile phone market at that time.
Source/Visual China
Glory, which later became the biggest rival of Redmi, released the first mobile phone Glory 3C after the brand independence 5 months later, the same level of MediaTek quad-core processor, the price of 798 yuan is exactly 1 yuan lower than the Redmi mobile phone 1, the same main cost performance.
Also in this year, OPPO deputy general manager Liu Zuohu left to create a plus brand, although it is known as independent, but the production of one plus mobile phones and related technologies are related to OPPO, and therefore regarded as one of oppo sub-brands.
In December 2014, Meizu released the Charm Blue brand, and released the Charm Blue Mobile Phone 1 a month later, directly reducing the price of the Redmi mobile phone 799 yuan by 100 yuan.
Between 2013 and 2017, the penetration rate of domestic smart phones increased significantly, and mobile phones were still in the incremental market, during which the three sub-brands of Redmi, Glory and Charm Blue were calling for wind and rain in the low-end mobile phone market.
According to the data of various official and Counterpoint companies, as of July 2016, Redmi mobile phones have sold 110 million units; in 2016, the shipment volume of Honor mobile phones reached 72.2 million units; before the release of the Charm Blue Note6 in 2017, the cumulative sales of Charm Blue mobile phones were 45 million units, which exceeded the sales of Xiaomi, Huawei, and Meizu's own brand mobile phones in quantity.
OPPO's sub-brand Yiplus attracted a group of loyal fans with a cost-effective strategy during this period, and helped OPPO fill the gap in the domestic product line at that time with a cost-effective model equipped with high-end chips. This also strengthens the determination of OPPO and vivo, which are also BBK departments, to officially enter the sub-brands.
In 2018, OPPO created a sub-brand Realme for the Indian market, and released the main cost-effective mobile phone Realme 2, which became the first cutting-edge brand in the Indian market that year. The following year, he returned to the domestic market with a RealmE X priced at less than 1500 yuan, and the front was "hard" at that time, the ruler of the middle and low prices, Redmi and Glory.
Vivo, which has been standing still, finally came late in 2019, and the sub-brand iQOO set up began to focus on the Xiaomi 9 series, which is known for its cost performance, and the price of 2698 yuan was just 1 yuan lower than that of Xiaomi 9.
At this point, all domestic mobile phones have at least one sub-brand that is "born for cost performance".
It is also from around 2018 that sub-brands specializing in cost performance have grabbed the market, Xiaomi, OPPO, vivo have the confidence, and begin to brush together with their own brands to further impact the high-end. The pricing of Xiaomi 10 is more than a thousand yuan higher than that of Xiaomi 9, OPPO restarts the Find series, and Vivo will also explore the price of X and NEX two major high-end series products again.
For the sub-brands themselves, playing the first card of "cost performance" is only the beginning, completing the initial mission of conquering the market for the parent company, and they are destined to face many problems in the process of further development.
Growing pains for sub-brands
As the first two brands to conquer the mobile phone market with a sub-brand posture, Redmi and Glory were the first to make a name for themselves with cost performance, and once dominated the low-end mobile phone market, and were regarded as the "enemies of life" in the sub-brands.
The two companies have repeatedly disagreed, the offline poster wording has been "coincidental crash", and online executives have frequent verbal battles. But you scramble, Redmi and Glory are only the difference between who sits first and second, and followers such as Charm Blue have never threatened the "king" status of the low-end market of the two sub-brands.
However, sitting on the low-end Redmi and Honor mobile phones, it has also left a solidified "cheap" impression for young consumers using these two brands, bringing low user retention.
Yang Ming, who used the Redmi Note3 in college, told me that he bought this Redmi mobile phone in his early thousands because it was cheap and easy to use. After finding a job after graduation, with income, he quickly spent more than 3,000 yuan to change to an iPhone 7, and then changed to a new iPhone, and also changed to Huawei, but did not consider Redmi.
And Yao Jun, a colleague who was still using honor 5X when I first worked, sent out the box of Huawei's Mate series in the circle of friends two or three years ago, thus completing the "consumption upgrade" after income growth.
This is also a common problem faced by sub-brands that start with cost performance, and the number of young users they attract, unless there is a big product problem, the overall scale is relatively stable.
But users are also rational, and the cost performance cannot play the brand effect and recognition. Due to the focus on performance and cost control, Redmi and Glory mobile phones have obvious deficiencies in design and quality, and they are unable to meet the further needs of users after they grow up.
A group of old users are gone, a new wave of users come again, and the cycle begins again, and the business with this as the basic disk will inevitably encounter growth bottlenecks.
According to the data in the relevant press releases of the Redmi Dynasty, since the 2014 Redmi Note1 set a sales record of 27.53 million units, the sales of more than 25 million Redmi Note3, Note4, Note5 and Note7 series have always hovered around 25 million, until the 2019 Redmi Note8 series, with the improvement of texture, broke through the bottleneck of 30 million.
However, for Redmi and Glory, they still have at least tens of millions of basic sales plates, although it is difficult to go further, but it can always ensure the retention of the brand.
For other sub-brands that did not enter the game in the early stage and did not form a high degree of recognition in the minds of cost-effective users, each step must be like walking on thin ice, leaving them with little room for fault.
Meizu's Charm Blue is one of the sub-brands that make mistakes.
Zheng Jun, who has opened Meizu stores, told Jioupai that when Meizu was still selling in 2017, "ten units were sold in the store, and nine were all charm blues." Sales data of the same year shows that Meilan mobile phones sold more than 15 million units, accounting for about 80% of the entire Meizu 20 million sales.
In 2018, for the sake of pursuing profits, the cost performance of the new model of Meilan 6T declined, the advantage of relative competitors was insufficient, and the sales suffered Waterloo, and then the then Meizu CEO Huang Zhang used this as an excuse to abandon the Meilanzi brand.
The same dilemma also once appeared on the one-plus mobile phone that became famous for its cost performance and "geek fan".
After the success of the one plus 1 in 1999, in 2015, the one plus 2 and the mid-range mobile phone one plus X were launched successively.
Before the launch, confident CEO Liu Zuohu placed nearly 1 million orders for one plus 2. However, due to the extremely poor power consumption control of the Snapdragon 810 chip and the lack of function that year, the sales of the OnePlus 2 were much lower than expected, and the hastily launched OnePlus X was also coldly received by the market due to lack of recognition.
One plus 2 finally tens of thousands of units can not be sold, several twists and turns to find overseas traders to take over at a low price, and finally cleared overseas. According to the report of Caijing magazine, the final tail of one plus X was cleaned up by OPPO.
Since then, OnePlus has not ventured from the 3rd to 6th generations, and has been adhering to the route of steady upgrading, ensuring a certain cost performance while equipping high-end chips. And in the few years when OPPO lacked high-end chip models, it struggled to fill some market vacancies, which is "stuck", but it has not been able to go further.
As for the relatively new Realme and iQOO sub-brands, although they were not long established, they also have their own concerns.
Realme, which has returned to China for more than two years, still adheres to the cost-effective strategy as a whole, and has also achieved 10 million domestic sales in 2021.
However, in order to seize the market faster, Realme has released as many as 14 models in the past year, playing the "machine sea tactic".
As a sub-brand, its large factory resources can be divided is always limited, a large number of models to the market, Realme a variety of models such as X50 Pro, X7 have the problem of lagging software updates, which also caused the question of "one hammer deal" in the forum.
iQOO, on the other hand, opened the price increase mode when the foothold was unstable, and the replacement model of iQOO 1, iQOO 3, started from 2698 yuan to 3598 yuan, and the follow-up iQOO 5 and other models jumped to 4000 yuan.
While abandoning the cost performance, iQOO has also invested in sponsoring KPL events and EDG and other e-sports teams. Trying to get ahead of the vertical category of esports.
But when visiting two VIVO offline stores in Jianghan District and Jiang'an District, the salesman told me that the latest generation of iQOO 9 mobile phones "didn't buy many people" and recommended the X70 Pro+ at the same price to me.
When I asked further about the sales of the previous iQOO model, the salesman was short of interest, but vaguely said that the iQOO sold better a year ago.
It can be seen that after playing the first cost-effective card, sub-brands are trying to broaden the market. But whether it is Redmi and Glory, which have a solid basic disk, or the short-lived charm blue, or the OnePlus, Realme, and iQOO, which have their own audiences, they have not been able to find an effective direction and strategy. Nor can it allow itself to grab more market share.
This is a question that many sub-brands have not yet been able to answer, but this is not the biggest uncertainty about the future of sub-brands.
After all, they are pawns, and their fates are different
Regardless of the bleak scenery of the sub-brands, all the sub-brands cannot deny the fact that all their products and market layouts are ultimately serving the overall strategy of the parent companies such as Huawei, Xiaomi, OPPO, vivo, etc., and the individual can only exist as the "pawns" of the parent company.
As mentioned above, all sub-brands have chosen to seize the market at the beginning of their establishment, and another important reason is that private brands need to hit the high-end.
However, nearly three years after the debut of all sub-brands, the high-end dream of "Huami OV" has rarely succeeded.
Among the four major domestic mobile phone brands, Huawei has successfully stood at a high-end price of more than 5,000 yuan around 2019, but due to continuous sanctions by the United States, Huawei has fallen rapidly from the second half of 2020. OPPO, vivo, and millet, which have been impacting the high-end, have failed to take over huawei's vacated high-end share.
According to the report compiled by zhihu blogger @ Anhu Protector who pays attention to the retail data of the domestic mobile phone market, in November 2021, in the domestic 5000-8000 yuan mobile phone price segment, Apple's share reached a staggering 82.4%, Huawei still has a continuous decline of 9.6%, while OPPO, vivo, xiaomi share are less than 3%, 8000 price segment, Apple is riding the dust with a 94% share.
This not only shows the weakness of domestic mobile phone private brands in impacting the high-end, but also makes the sub-brands that carried the task of seizing the low-price market quite embarrassing.
In other words, the experience of the past two years has proved that although it is a good strategy to grab the low-priced market with sub-brands, it is obviously not a matter of sending several sub-brands to fight for shares at low and medium-low prices.
What's more, sub-brands also have a sense of autonomy, but they are limited by positioning, and their fate is not controlled by themselves.
Once the glory of Huawei's sub-brand, it is considered the "lucky one" among many sub-brands, and after Huawei was severely damaged by sanctions, Glory declared independence in November 2020 and received a large number of Resources from Huawei.
A mobile phone dealer in Jianghan District told the odd couple that many of the sales channel resources withdrawn by Huawei were basically accepted by Glory. The glory of letting go of hands and feet is carrying the task of lifting up and seizing Huawei's former market.
But other sub-brands, not so lucky.
OPPO's OnePlus, which successfully explored the price of more than 4500 yuan with one plus 7 Pro in 2019, but was quickly beaten back to its original form due to a series of operations, and finally merged with OPPO last year, and even after-sales channels were returned to OPPO, and now there is almost no sense of existence.
Another sub-brand, Realme, has made a lot of sales in the past two years with its low-to-mid-price machine tactics. However, under the strategic layout of OPPO, there are only online channels so far, and I have visited three OPPO offline stores, and I have received a reply that there is no Realme machine in the store.
Vivo's iQOO is a sub-brand with relatively clear tasks in vivo's strategic layout, the X series focuses on high-end business and exquisite people, and iQOO is aimed at e-sports and young people.
However, the high price of iQOO 8 and iQOO 9 series is often 5,000 yuan, so that iQOO's sales in the past two years have remained at about 3 million units. The NEX series, which has just been cut by vivo, its sales performance is also roughly stuck in this gear.
At the end of last year, Feng Yufei, the head of iQOO, quietly left his post, making the prospects of iQOO more and more uncertain.
The most stable thing is probably Redmi, always implementing the cost-effective strategy, with the full coverage of the middle and low prices and the basic disk of 40 million sales, it is a solid backing for Xiaomi to impact the high-end.
Looking at the sub-brands of Huami OV, in addition to the good fortune of glory being sanctioned by Huawei and accidentally changing from a supporting role to a protagonist, the current situation of Redmi may be the best ending that sub-brands can have.
Write at the end
To some extent, the existence of sub-brands is the "characteristic playing method" found by domestic mobile phone manufacturers to impact the high-end.
In order to let its own brand achieve the cognition of "high-end and high-grade" in the minds of consumers and achieve brand premium, Huami OV has created a sub-brand to carry the labels of "cost-effective player" and "cheap product".
This is understandable, but after the sub-brands have completed their mission, we rarely see domestic mobile phone manufacturers have a clearer product positioning, planning, and significant resource tilt for sub-brands.
Sub-brands have not been able to complete the synergy with their own brands, and occasional explorations are difficult to say successful, and in the end, they are generally trapped in the cost-effective one-acre and three-point land competing with each other, and they have not been able to achieve the further development of the brand.
Judging from the situation of the new round of sub-brand fierce battle, sub-brands have become, and will still be, an important force for domestic mobile phone manufacturers to compete for the market; but the high-end market that really needs domestic mobile phones to compete for, whether it is sub-brands and "Mi OV's own brands", there is still a long way to go.
Resources:
1. "Behind the double 11 sales carnival, the mobile phone jianghu "little brothers" counterattacked to the top", wisdom things;
2. "Glory Redmi Begins a New Journey: Why Are Mobile Phone Brands Keen to Raise "Dry Sons"? Xiao Qian;
3. "China Mobile Phone Sub-Brand War", Wise Finance;
4. "China's Mobile Phone Past", Tencent Deep Web.
*The caption image is from Visual China.
*All interviewees are pseudonyms.