Zhi DongXi (public number: zhidxcom)
Author | Yunpeng
Edit | Heart edge
Just in the past month or so, domestic mobile phone manufacturers have released more than ten new products, including eight or nine flagship mobile phones, plus the third generation of Apple iPhone SE to "stir up trouble", the domestic smartphone market is not busy.
However, contrary to the popularity of the new machine tide, according to a statistic by CINNO, the overall sales growth of the domestic mobile phone market in January was almost stagnant, and the sales of head players such as Xiaomi, OPPO, and Vivo even dropped significantly year-on-year.
▲Brand sales in The Chinese smartphone market in January 2022, source: CINNO Research
Among domestic manufacturers, the year-on-year growth of Honor's 243% is somewhat eye-catching, and it can even be said that it is "alternative", and it is worth noting that if OPPO excludes the sales volume of realme and Vivo excludes the sales volume of iQOO, then Glory will undoubtedly become the first sales volume in the domestic market.
You know, a year and four months ago, Honor was a "newly established" company. Honor CEO Zhao Ming once revealed in a media interview that at the beginning of Glory's establishment, they set a goal to be the first in the Chinese market in 12-18 months.
At the time, it sounded like this goal was a bit "crazy", but now it seems that Glory has completed the goal ahead of schedule.
▲Honor CEO Zhao Ming at the Honor Magic4 global new product launch conference
After the domestic conference of Honor Magic4, Zhi Dong had an in-depth exchange with a small number of industry media and Zhao Ming, a glory trader, who specifically mentioned that they no longer value market share, impact the high-end and challenge Apple, which is the longer-term goal of Glory.
From the release of the first new machine in the first two months of independence, to today's monthly sales of more than 5 million, what did Glory do right, behind the bottoming out is the "lone hero" or "everyone collecting firewood and the flame is high"? Behind the soaring sales, can Glory really sit back and relax? These questions are worth digging into and thinking about.
It is undeniable that although Glory has "cut" with Huawei, at the moment when Huawei's mobile phone business is still experiencing a harsh winter, Honor is still given more expectations, expecting it to successfully "take over" Huawei, and Glory has also become the focus of attention in the industry.
Now it seems that Huawei's big banner, glory may be able to carry to a new height, but the challenge is not small.
First, it sells so well, how does glory do it?
In the months after independence, Glory once ushered in its own "darkest moment" in sales, because everything was recovering and reorganizing, and new products were delayed, and Glory's market share fell to less than 3%.
However, only half a year later, Honor regained 14.6% of the domestic smartphone market in the third quarter of 2021, and in the following four quarters, according to IDC statistics, Honor became the first Chinese mobile phone brand in the domestic market with a market share of 17%.
▲2021 Q4 China smartphone market shipment share, source: IDC
Looking at the domestic shipment results for the whole year of 2021, Glory has also returned to fifth place from "Others".
In many media interviews, Zhao Mingdu has revealed the determination and goal of glory, and can see that their mentality is very positive, and this positive face has indeed been exchanged for positive feedback from today's market.
Digging deep into the reasons behind it, from the supply chain to the product, to the channel, marketing, it can be said that it is a link, and the internal and external factors complement each other, and one is indispensable.
In the view of Zhou Hua, chief analyst of CINNO, the product appearance, quality and excellent competitiveness in the same price segment are the more prominent characteristics of Honor products, and with these advantages, Honor has seized a lot of domestic markets in the 2-4K price segment.
▲ Honor 60 series
At present, the price segment of about 2K is one of the main price segments shipped by domestic Android manufacturers, and it is very critical to have a strong product layout in these key price segments if you want to get an advantage in sales.
According to a global best-selling mobile phone report by Rising Sun Big Data, Honor occupied three places in the global 5G mobile phone TOP20 best-seller list in the fourth quarter of 2021, including the Honor 60, Honor 50 and Honor X20 series, and the fourth quarter sales of the Honor 60 series reached about 2.3 million units.
According to the data of the China Academy of Information and Communications Technology, the current domestic market 5G mobile phone shipments have accounted for more than three-quarters, it can be said that Glory's bright performance in the 5G mobile phone market is also one of the important factors to help its overall shipments grow rapidly.
In addition, Honor's integration and combing of the supply chain and key layouts have had a positive impact on Glory, for example, Honor is currently actively increasing olED usage with various friends, helping BOE, TCL Huaxing, Visionox, Tianma and other screen manufacturers to improve yield and improve technology.
It is understood that the Glory folding screen Magic V series is very obvious for BOE's high-end domestic flexible AMOLED screen technology.
Of course, objectively speaking, Glory's current high growth is also based on filling the previous "market gap".
In the whole year of 2020, Huawei and Honor shipped a total of about 37% of the Chinese smartphone market, of which Honor had a share of 15% and Huawei had a share of 22%.
▲ Shipments of China's smartphone market in 2020, data source: CINNO
If according to the 15% market share, the current glory 17% market share compared to its peak, about 2 percentage points, the glory after the new life, it can be said that the completion of the "from 0 to 1" process, and whether the follow-up can continue to maintain and further improve, is the key.
In addition to the above internal factors, Glory's dealer friends have also played a vital role in Glory's turnaround battle.
In the view of Sun Yanbiao, president of the First Mobile Phone Research Institute, the relationship between Glory and dealers is more like the model of "Chinese partners", in fact, dealers can share the dividends brought by Glory's active expansion in the country and even the global market in addition to getting normal sales profits.
This is actually very easy to understand, glory and dealers are like an "entrepreneurial team", since it is a business, it is bound to be a huge initial investment, and may even "not make money", but everyone will still try to rush forward.
This also forms a virtuous circle: dealers actively ship for Glory, Glory has money to better expand the global market, and Glory's success will feed back to dealers who are shareholders. The initiative of dealers is very critical.
Dealers are very proactive, and this is critical.
From the list of honor dealers, we can see that these dealer partners of glory are basically the head players in their respective provinces, cities and counties, and as the saying goes, they are all "old cannons" in dealers.
▲Glory major shareholder
These dealers have been working hard in the mobile phone industry for many years, and they are very familiar with Huawei and Honor's products before, and have abundant capital to support, and are also familiar with the dafa of the market, which can quickly achieve large-scale new product sales.
It can be said that these dealers are the key pillars that allow Honor's monthly sales of more than 5 million to "land".
Second, the hidden worry behind the glory of the high: "shipment ≠ selling"
Since it comes to the dealer "selling goods", I actually contacted a mobile phone dealer to try to understand the real glory sales situation on the retail side.
How do Honor phones sell in the market? And this question does not matter, let me directly see a hint of worry behind the high sales of glory.
Guo Liqing is a dealer who has worked hard in the mobile phone industry for more than 20 years, with an annual turnover of billions, and he has his own unique views on Apple, Huawei, Glory and the situation of domestic mobile phone manufacturers.
Previously, there was industry news that Glory had a relatively obvious phenomenon of "pressing goods" offline, and this phenomenon was also confirmed in the communication with him, and the pressure of goods was indeed a thing.
In fact, mobile phones from the manufacturer to the hands of consumers, but also through the national contractors, agents, retailers and many other links, glory of the channel is very wide, and glory to the dealers to press more goods.
What we usually call "sales" actually has to be viewed from two perspectives, if from the perspective of manufacturer shipments, the products produced are shipped to the distributor, but the real retail sales for consumers are another matter.
So how can we better judge the real sales volume of the retail side? The number of device activations should be a more informative indicator, and manufacturers seem to have a "tacit understanding" and rarely publish this data.
Guo Liqing told Zhi Stuff that as far as the situation around him is concerned, many retailers are now unwilling to sell glory, on the one hand, the pressure on goods leads to low market prices, and there will also be chaotic prices, and the final result is that the front-end sales are actually "not making money".
Since it does not make money, the enthusiasm for sales is discounted.
At the same time, the strict control of glory also makes them unable to "string goods", dealers can not string goods, can not sell across provinces, to a certain extent, aggravate the problem of inventory is difficult to digest, reduce the way dealers reduce costs.
Although Honor is a new company, in fact, Honor inherits a lot of huawei's previous channel system, the channel laying is very wide, once a large number of goods, you can achieve more beautiful sales data in a short period of time.
Although the big dealers who have invested in Glory may have a longer-term view, for more small and medium-sized retailers, whether they can earn real money is more critical. In his view, if you can't make money for a long time, you still need to bear the risk of crushing goods, and it is not certain whether these retailers will continue to buy it.
According to industry information, the current rebates given by Honor to the offline market are about 15%-18%, which is basically the same as Huawei's previous standards, while oppo and vivo's rebates are usually above 20%, in this regard, Honor has no advantage.
Due to the difference between the institutional data and the situation in his mouth, I also gave the statistics of the market research institute to Guo Liqing, but in his opinion, "if the terminal retail really sells so well, then the current amount should be more than he announced." ”
After going deep into the retail end, we can see that the glory of rapid growth in sales volume, on the one hand, is deeply dependent on the support of dealers, but on the other hand, the final shipment pressure also falls on every dealer and agent at the retail end.
The rise of glory is true, but the hidden worries behind it should not be underestimated. On the terminal retail side, Honor may need to think of more ways with dealers.
Third, the impact of high-end initial stability, benchmarking Apple also to come up with "real skills"
Although Glory is independent of Huawei, it is undeniable that in the eyes of many people, Glory has some meaning of Huawei's "orthodox successor".
If you look at it from the perspective of carrying the banner of Huawei, the return of Glory in mobile phone sales is only part of it, and there is also a part of the more important task, that is, to pick up the domestic high-end Android market.
As mentioned earlier, Zhao Ming said in an interview with the media that now they have paid less attention to market share internally, but have paid more attention to benign development and launched an impact on the high-end market in an all-round way.
Honor's impact on the high end is not an isolated case, but one of the major trends in the current smartphone industry. On the one hand, manufacturers are seeking new growth points in the almost saturated market, on the other hand, they also leave more room for improving the technical content of products.
In 2021, China's smartphone market ended four consecutive years of declining shipments, and finally achieved shipments of 329 million units in 2021, but the year-on-year increase was only about 1%.
▲China's smartphone shipments from 2012 to 2021 (unit: million units), source: Statista
The global smartphone market shipments reached 1.354 billion units in 2021, up 5.7% year-on-year, but still far from 1.5 billion units at its peak in 2016. Chaodian Think Tank expects that global smartphone shipments will fluctuate between 1.1 billion and 1.2 billion units in the next three years, and it is difficult to increase significantly in the overall scale.
Contrary to the decline in sales, the average price of global smartphones has increased year by year, reaching a year-on-year increase of 11.8% in the first half of 2020 and a month-on-month increase of 7.5%.
Impacting the high-end is a choice that manufacturers have to make. Manufacturers need to find new highlights to stimulate the weak mobile phone market, and the highlights mean the investment of technology, capital, talents, the increase in costs, and the price of mobile phones is also rising.
As Glory said itself, they are already very skilled in making low-end models, and the difficulty now is to impact the high-end market.
In a global best-selling mobile phone report by Rising Sun Big Data, we can see the performance of various manufacturers in high-end best-selling models. Since the statistical scope of the report is the TOP20 mobile phone model in each price segment, the sales proportion of the following models is only the proportion within the statistical range.
In the second quarter of 2020, when Huawei was at its peak, the sales volume of its high-end models of more than 3,000 yuan accounted for about 50% of the statistical range, and even the sales of flagship models above 4,000 yuan accounted for nearly 40%. Huawei's Mate30 and P40 series are indeed Huawei's main shipping models.
▲ 2020 Q2 Huawei, Honor more than 1,000 yuan of best-selling models sales, data source: Rising Sun Big Data
After Huawei's mobile phone business was restricted, many consumers lamented that the high-end market has become Apple's monopoly, and from the data point of view, Huawei's Mate and P series have indeed performed well in the high-end market.
On the other hand, in the second quarter of 2020, models below 3,000 yuan accounted for nearly 90%, and models below 2,000 yuan accounted for more than 54%, it can be said that before independence, the absolute main force of glory mobile phone sales was low-end models.
In the fourth quarter of 2021, the Honor Magic3 Pro has rushed into the TOP20 best-selling models above $800 (about 5100 yuan), and the high-storage specifications of honor magic3, honor 60 pro and honor 50 have also become more eye-catching models above 3000 yuan.
▲2021 Q4 Huawei, Honor best-selling models sales, data source: Rising Sun Big Data
Of course, if you focus on the actual sales ratio, the sales proportion of models above 3,000 yuan of Honor is still less than 10%, compared with Huawei in that year, there is more room for improvement.
It can be said that Glory has initially entered the high-end market, but if you want to stand more steadily, there is still a lot of homework to be done.
How did Apple and Huawei at their peak do a good job in the high-end market? This can be said to be a question that almost all domestic smartphone players are thinking about and trying to give answers to today.
Apple's software and hardware self-development integration, deep integration of ecological advantages, the identity attributes of the world's top giants in the technology industry... Huawei's national brand tone, excellent product quality, domestic self-developed Kirin chip, domestic self-developed operating system Hongmeng...
Perhaps analyzing Apple and Huawei, we will always give endless examples to prove their high-end attributes, so what else is needed for today's glory?
According to the actual sales data, Honor's flagship mobile phone of more than 3,000 yuan is still relatively general in terms of sales, and according to the statistics of Rising Sun Big Data, in the top 20 of the world's best-selling models above $600 (about 3800 yuan), Xiaomi is still the leader of Chinese brands, occupying 4 models.
Guo Liqing said that in his view, Huawei's success in the high-end market that year, the factors behind it are very complex, Huawei has its own unique brand tone, both high-end attributes, sense of quality, and Kirin chip is a representative of China's cutting-edge technology in the field of semiconductors, which can confront Qualcomm in the United States.
In addition, Huawei's channel system is very mature, and the channel shop is very wide and deep, so the new products can soon be large-scale and contact with consumers at the first time. And most importantly, Huawei's mobile phone products themselves are excellent, and the products are very popular with consumers.
▲Huawei Mate40 Pro
At present, Glory may lack some "its own things", the glory that once survived under the Huawei tree, the main tone of "young, tide design" and so on, and today Glory needs to do its own flagship machine, do high-end brand.
Although honor management has a clear plan for honor's brand positioning, for many ordinary consumers, honor may be more of a "temporary replacement for Huawei". At least for now, this change in impression requires Glory to dive in and truly prove its difference with a wide range of technology, products and marketing.
Now glory self-reliance portal, to play their own new signboard, for now, this new sign does not seem to have hit the hearts of consumers.
Although Honor continues to emphasize what self-developed technologies are included in its products, and Honor's team continues to incorporate new blood, consumers are only exposed to products.
Honor 60 series and Huawei P50 series are very similar to the back design, Honor Magic3 series and Huawei Mate40 series consistent "Star Ring" lens module, Honor Magic4 series continue the classic...
▲Top: Honor Magic3 series, Bottom: Huawei Mate40 series
For the average consumer, perhaps what they see is more of a "replacement for Huawei" than a brand new high-end mobile phone brand upstart that can break the wrist with Apple.
Overall, Honor wants to retake Huawei's high-end road and launch an impact on Apple, and the technical difficulties in products have been gradually solved, and it has become a greater challenge to find an accurate positioning for itself and brand characteristics that can penetrate the hearts of consumers.
Glory needs to slowly build its own high-end tone, and this process is not an overnight achievement.
Conclusion: Glory 'secondary entrepreneurship' small victory, high-end is still a hard bone
Glory and dealers' "secondary entrepreneurship", it can be said that it has achieved a stage victory, in the domestic and overseas markets "two blossoms", behind the rapid growth of sales, you can see glory in the product, channels and other aspects of the solid basic skills, but at the same time to avoid rushing too fiercely, to let the retail end "good digestion".
Large-scale shipments take time to digest, and whether the product can win the recognition of consumers is the key to digestion. The dividend inherited from Huawei has allowed Glory to win at the starting line, and whether it can find more of its own is a key factor in whether New Glory can "stand" in the hearts of consumers.
Under the general trend of unanimously impacting the high-end and benchmarking Apple in China, Glory, as the successor who carries the banner of Huawei, obviously runs faster and has a fiercer force, but it is not a breath to rush to the high-end, but a more lasting accumulation, a deeper technical sacrifice, and perhaps, a little "time and place".
After completing the expansion from 0 to 1, how to go from 1 to 10, from 10 to 100, will be a greater challenge. Glory hits the high-end road, but also the road is obstructed and long.
(Guo Liqing is a pseudonym in the text)