Chen Mingyong re-posed the battle front: OPPO main attack, realme surprise attack, one plus strategic retreat

Image source @ Visual China

Wen | Stone Business Review, written by | Watson

Having OPPO, realme and one plus three brands at the same time inevitably causes OPPO to disperse resources and energy, which is not the optimal corporate strategy. Chen Mingyong, who has always insisted on "doing the right thing", is extremely keen, and he knows that concentrating resources on saturation attacks is a more correct choice than dispersing resources, so from the top-level strategy, OPPO, realme and one plus three brands have been rearranged.

01

Although quite low-key, OPPO founder Chen Mingyong is a good player who is not soft at fighting.

Around 2011-2015, it was a critical period for China's mobile phone industry to shift from feature phones to smart phones, when many eyes in the industry were still focused on Xiaomi's Internet model, Chen Mingyong led OPPO to do the opposite, focusing on offline channels.

At the same time, Chen Mingyong did not turn a blind eye to the Xiaomi model, and at the end of 2013, he sent a capable general Liu Zuohu to create an Internet brand that benchmarks Xiaomi, OnePlus, which undertook OPPO's exploration of the Internet model.

Both of OPPO's strategies have yielded good results. Among them, the OPPO brand continued to attack with the advantages of differentiated R series products and offline channels, and finally stood at the peak of the Chinese smartphone market around 2016. OnePlus mobile phones have also gained a good reputation in the industry, especially in the overseas high-end market.

But over time, China's smartphone industry has seen new changes around 2018. On the one hand, the domestic smartphone market is saturated, and the overall shipment volume has begun to decline; on the other hand, the domestic smart phone market has begun to return to order, forming a stable competitive pattern of Huami OV's top four competition. In the market has no new increment and several major smartphone manufacturers have formed an oligopoly, the competition between the oligopoly mobile phone manufacturers has begun to become a dead-and-die stock competition, if a company achieves market share growth, then the market share of several others will definitely decline.

Among them, Xiaomi, Glory and Huawei, which occupy an advantage online, covet the huge market scale offline and begin to lay out offline in a large scale, intending to encroach on the market share of OPPO, which occupies an absolute advantage offline. And OPPO if it just sticks to the development ceiling, no longer has a new incremental offline market, it is also impossible to keep, because offline shortcomings to make up for Huawei, millet and glory will inevitably encroach on part of its offline market share, so OPPO at this time in an effort to defend the offline market at the same time, more importantly, must surround Wei to save Zhao, counterattack Millet, glory and Huawei online advantage market, in order to obtain the incremental market outside the offline market.

In this context, OPPO on the one hand launched a more balanced online and offline Performance Reno product line to replace the R product line that has been stuck in offline channels before, and on the other hand, in 2018, it launched a new Internet brand realme, which is responsible for Li Bingzhong, an executive familiar with overseas markets in the OPPO system. Although they are mainly engaged in the online market, realme is different from the high-end boutique market of one plus brands, which is aimed at the young market that pursues cost performance, function and design.

Realme put the opening battle in the overseas Indian market, in order to make products that meet the needs of young Indian consumers, Li Bingzhong and the team have made a series of localization efforts, such as for the photography preferences of Indians, correcting the skin grinding and whitening functions that Chinese consumers like; for young people's favorite chicken eating games, targeted performance tuning for mobile phones; Indians like to sing and dance, realme will do a better job of high-frequency sound quality in the high-frequency sound area..., in addition, Realme has also appointed a local executive team with full responsibility for the Indian market.

After full preparation, in May 2018, realme launched its first mobile phone realme 1 in the Indian market, which was a great success, occupying 1% of the local market in the first month of listing, and the second best-selling smartphone sales in the Indian online market in June. In the fourth quarter of 2018, data released by market research institute Counterpoint showed that realme became the fourth largest brand in the Indian mobile phone market, the fastest mobile phone brand to reach 4 million units sold.

After becoming popular in the Indian market, realme then entered 10 overseas markets such as Indonesia, Vietnam, Malaysia, Thailand and Egypt, all of which achieved good results. And in 2019, it also began to return to the domestic market to help OPPO's overall counterattack in the domestic online market.

02

On the one hand, because of the effectiveness brought by OPPO's self-help, on the other hand, because of the lack of supply of Huawei mobile phone chips, the competitive pressure has been greatly alleviated, which has allowed OPPO to reverse the trend to a certain extent in 2020.

First of all, oppo's main brand began to stabilize, not only the product line gradually completed optimization, but also initially completed the layout on ecological smart hardware products such as smart watches and smart TVs.

Secondly, realme has made great progress, and sales at home and abroad have increased rapidly. And realme's outstanding performance in the cost-effective market is of strategic significance to OPPO as a whole, which can greatly liberate the pressure of OPPO's main brand and let it concentrate more resources and energy on the high-end market.

The OnePlus brand, which has been pinned high hopes on before, has been standing still in recent years, tepid and has not made much substantial progress. And in the high-end market, there is also a big conflict between oneplus' product line and OPPO's newly launched high-end product line FIND series.

In this case, having three brands at the same time has caused oppo to disperse resources and energy, which is not the optimal strategy. Chen Mingyong, who has always insisted on "doing the right thing", is extremely keen, and he knows that concentrating resources is a more correct choice than dispersing resources, so from the top-level strategy, he began to rearrange the three brands of OPPO.

Among them, as the main brand, OPPO undoubtedly still bears the heavy responsibility of OPPO company in the most core battlefield and competitors. In particular, the three core strategies of high-end, science and technology and ecology are all carried by the OPPO brand.

At present, in the smartphone category, the OPPO brand has formed a product line with Find N series, Find X series, Reno series, K series and A series as the core. In the field of ecological intelligent hardware, it has also completed the layout in several core categories such as smart TVs, tablet computers, smart watches, smart bracelets, smart headphones and smart glasses.

The realme brand is separated from the OPPO brand and focuses on the online cost-effective market. In the case of OPPO fighting several core brands in the frontal battlefield, Chen Mingyong hopes to use realme to complete its surprise attack in the online cost-effective market, and form a strategic synergy similar to the previous "Huawei + Glory" with OPPO.

The realme brand also lives up to expectations, and has now formed four competitive product lines of GT series, Q series, X series and V series, and has completed sales of 60 million yuan worldwide and 10 million+ sales in the Chinese market in 2021, ranking among the top six in the world and the top four smartphone brands in China. In addition, in 2022, it also put forward a grand sales target of 100 million units for the whole year, if this goal is completed, the realme brand will occupy half of oppo's overall sales, and its strategic position in the company is bound to be further enhanced.

For the OnePlus brand, we can clearly see that Chen Mingyong has adopted a strategic contraction deployment. In June 2020, it recalled Liu Zuohu, the founder of OnePlus, to the headquarters and made him a senior vice president of the company, fully responsible for the company's overall product planning, especially the creation of OPPO's high-end product line. On the one hand, it stems from Liu Zuohu's energy transfer, on the other hand, it is necessary to make way for OPPO's high-end, which directly leads to the product line of OnePlus entering a state of incompatibility in 2022.

The first quarter of each year is the most important product release period for each smartphone company. In the first quarter of 2022, the OnePlus brand only released one product, one plus 10 Pro, and the minimum 8GB+128GB version started at 4699 yuan.

In recent years, various mobile phone companies have become accustomed to taking the digital series as their flagship product series, and set up three models on specific products: super cup, large cup and medium cup. For example, in 2021, the OnePlus 9 series has four products: OnePlus 9R, OnePlus 9RT, OnePlus 9 and OnePlus 9 Pro. Generally, the super cup products will use the top match in the core areas of performance, image and sound quality, the pricing is higher, and it is difficult to go to the volume, mobile phone companies are mostly using the super cup to play the brand, and using the large cup and the middle cup to go. The best rhythm of these product releases is to release them at the same time, and it is not a good thing to release the big cup too early or too late. If you release the oversized cup product first, when the big cup and the middle cup are listed, the user will no longer have a sense of freshness. If the large cup and the middle cup product are released first, then there will be no heat when the super cup is released.

What is surprising is that OnePlus skipped the middle cup and the large cup product, and directly released the OnePlus 10 Pro on January 11 this year, which is a very difficult to walk super cup product. And nearly 3 months after the release of the OnePlus 10 Pro, the other products of the OnePlus 10 series have been delayed, which is a product rhythm that a brand that has been established for nearly 10 years should not have.

In contrast, the OPPO brand, at the recent FIND X5 series conference, released two products at the same time, FIND X5 and FIND X5 Pro, and FIND X5 Pro also includes two versions of Snapdragon and Tianji. Under such circumstances, it is difficult to expect that the OnePlus brand will have any outstanding performance in 2022, and its overall sales may even decline sharply compared with 2021.

03

The OnePlus brand has a good reputation in the minds of some consumers, which makes these users feel sorry for the decline of the OnePlus brand to today's situation, but in fact, before the Return of the OnePlus brand to the OPPO matrix, it has its own opportunity for independent development.

In the giant smart phone market, it is difficult to survive as a small and beautiful enterprise, and it must have scale to support it, so that it is possible to build a competitive supply chain system and channel system. At the beginning of the birth of the OnePlus brand, it had made an attempt to expand its product line and offline channels and march into the main battlefield of the smart phone industry, but due to serious losses, it did not succeed, and finally had to choose a corner of the security and did not dare to try to develop on a large scale.

But for OPPO, a smartphone company with sales of nearly 200 million, OnePlus's annual sales of less than 10 million are insignificant, especially after the already having OPPO and Realme, two smartphone brands with sales of nearly 100 million, the strategic position of OnePlus in the overall OPPO company has been weakened. If Liu Zuohu can initially seize the opportunity to cut into the frontal battlefield and sell OnePlus into tens of millions or even hundreds of millions, then it is possible that it has been an independent brand, and there will be no chance of realme after that.

Only in the past few years of leading the OnePlus brand, although Liu Zuohu has proved his talent in polishing a product, he has also proved his shortcomings in the systematic ability required to make a company bigger and stronger. If it were not for the support of funds and resources provided by OPPO, a giant enterprise behind it, the OnePlus brand is only at today's scale, and it may be difficult to survive independently to today.

However, OPPO's strategic retreat against OnePlus does not mean that the strategy is abandoned. With the passage of time, if there are new competitive changes in the smartphone industry in the future, just like the FIND series that was once shelved before OPPO restarted, it is also possible to once again enhance the strategic position of the OnePlus brand and make it assume a new mission in the new stage.

In addition, returning to OPPO is responsible for the company's overall product planning, for Liu Zuohu, the founder of OnePlus who is good at products but weaker than the operation, is actually a liberation, which can allow him to focus on what he is best at, and it is possible to create greater value for OPPO than at the helm of OnePlus. After all, it makes more sense to co-create a world-class company than to support a second-rate or even third-rate enterprise.