Coolpad phone, pity

Written by / Cheng Liang

Editor / Yang Jie

"Coolpad is still alive?" This is the first reaction of many users when they hear the Coolpad mobile phone brand.

Think of that year, coolpad, which ranked as one of the domestic mobile phones "China Cool Union", was once the leading brand of domestic mobile phones, and once sold more than Apple and Samsung. However, after "selling itself" to LeTV, Coolpad was also dragged down by LeTV's capital chain crisis and "disappeared" in the domestic market for 5 years. In 2021, Coolpad made a comeback, shouted Jia Yueting, and put forward the slogan of "returning to the first echelon of domestic mobile phone brands within three years", which has the posture of Jedi rebirth.

But a year later, Coolpad handed over a report card showing that in the whole of 2021, Coolpad sold a total of 126,300 mobile phones. According to Canalys data, the total shipment volume of the domestic smartphone market in 2021 exceeded 300 million units, and the top five smartphone manufacturers vivo, OPPO, xiaomi, Apple, and honor occupied 84% of the share, ranking first in vivo shipments of 71.5 million units. Compared with the sales of individual mobile phones of several major brands, Coolpad is less than one-tenth of it.

Coolpad's 2021 performance announcement shows that the company achieved revenue of HK$665 million last year, down 18.03% year-on-year; net loss was HK$572 million, an increase of 45.34% year-on-year. In 2021, the company's overall gross profit margin was 5.46%, down 9.58 percentage points year-on-year.

Since the resumption of trading on July 19, 2019, Coolpad's stock price has been below HK$1 for a long time, and it has long become a "fairy stock" in the eyes of many investors. As of the close of trading on April 8, Coolpad was quoted at HK$0.181 per share, with a total market capitalization of HK$2.499 billion.

In order to return to the peak, Coolpad took the cost-effective route and poached Xiaomi's talent reconstruction team. However, in the current domestic mobile phone market, is there still its location?

Cool pie returns, can you still eat?

Wei Zhe used to be a loyal user of Coolpad. He recalled, "When I was in high school, there was a time when it was very popular to use Coolpad mobile phones, and I followed the trend and bought Coolpad God F2, which was the first smartphone I used, used it for more than three years, and I was very impressed with it." However, he said that most people around him will still choose Apple if they want to change to a new machine now. "Compared with Coolpad, Apple's brand significance is definitely stronger now, and it is also a symbol of status."

Coolpad, which has been away from the domestic market for 5 years, quietly returned to the domestic mobile phone store in May 2021 with its new mobile phone COOL 20, which costs 699 yuan. In December 2021, Coolpad officially announced its return to the domestic market, and launched its first 5G mobile phone new COOL 20 Pro, with Tianji 900 chip, octa-core CPU architecture, priced from 1799 yuan.

In contrast, the current domestic smartphone head players, including Xiaomi, Honor, vivo and OPPO, have opened the road to high-end, focusing on products with a price of more than 4,000 yuan. At the high-end strategy seminar in February this year, Xiaomi clearly proposed that high-end is the "life and death battle" of Xiaomi's development.

When the domestic mobile phones were "more and more expensive to sell", coolpad sprinted the two models launched in the first year of the "first echelon", chose the main low-end hundred yuan machine and thousand yuan machine market, and wanted to penetrate in the domestic mobile phone market that has been divided up by the head brand through the low-cost model.

According to the Southern Metropolis Daily, Coolpad said when announcing the return, "The reason why it chose to return at this time is because the industry has a rare opportunity once in decades, mainly in the catch-up opportunity brought about by the slowdown in hardware iteration, the low-risk advantage in the rise of supply chain risk and the channel change opportunity brought about by the shrinking stock." ”

At Coolpad's "a new machine" conference in December last year, CEO Chen Jiajun said that when a number of mobile phone brands pursue high-end, the needs of a large number of low-end users have been ignored, and the return of Coolpad is to break the current industry's "user bias", "product bias" and "channel bias", reproduce the fairness of the industry, and pay tribute to the strivers with better products and services.

"Tribute to the strivers" has also become a new brand value proposition after the return of Coolpad. In addition to the sinking price of the new machine, Coolpad also proposed a new industry standard of "90 days to change the machine, 2 years warranty".

Sun Yanbiao, chairman of Rising Sun Big Data, analyzed that the market space vacated by Huawei is an opportunity for development for other mobile phone manufacturers, and Coolpad is also "waiting for an opportunity", and at the same time, when mainstream brands have rushed to the high-end market, they have targeted the low-end market space.

But in a year, Coolpad sold less than 130,000 mobile phones, less than a fraction of Xiaomi's 190 million smartphone shipments last year. According to the financial report, in 2021, Coolpad's revenue from overseas markets accounted for 83.07%, and less than 17% of the revenue came from the domestic market.

"Finance World" weekly found that as of now, Coolpad's self-operated flagship store in Jingdong has 275,000 followers, and the number of fans in the Taobao flagship store is only 4818. According to Jingdong's self-operated hot list, 18,000 people have bought cool smart phone COOL 20, and more than 400 pieces have been sold every month. In the Taobao flagship store, COOL 20 monthly sales are only 200+; while the monthly sales of COOL 20 Pro 5G mobile phones are only 7 pieces, and there are only more than 80 reviews. Compared with the monthly sales of low-end models of other mobile phone brands of nearly 10,000, this data is inevitably too "shabby".

For the majority of consumers in China, the Coolpad brand is already too strange. The last time Coolpad entered the public eye, it was because of a "cottage machine" oolong in 2021. At that time, the Kuaishou anchor "Donkey Sister-in-law Pingrong" overturned the car because of the sale of Duowei cottage machine, kuaishou issued a mobile phone e-commerce governance announcement, and all the mobile phone brands that had brought goods were blacklisted, and Coolpad was also mixed in it, and was put on the hat of the cottage machine together. Subsequently, Coolpad issued a statement saying that the models sold in the live broadcast room involved were not officially authorized by Coolpad for sale, and Kuaishou resumed the cool brand investment and moved it out of the "blacklist".

However, juxtaposed with the miscellaneous brand "cottage machine", the cool brand power is not strong, which can also be seen.

"I've heard the Coolpad name, but I won't buy it." Zhang Wei said after 95. He stressed that when he changes mobile phones, he will give priority to Apple and Huawei, "Their brand value is there, and the consumer group is also very wide, if I use Coolpad, it will seem unsociable." Even the older people in my family don't use Coolpad, they'd rather use the Apple or Huawei phones I eliminated. ”

After the 90s, Xu Meng said bluntly that she had not heard much about Coolpad. "The cost performance of this piece of millet has done a good job, even if the cool price is lower, out of consumption habits I will also choose millet, at least will not try and make mistakes."

Improving brand power is not a one-time thing, so Coolpad also emphasizes its "hard power" at the software level. At the cool 20 Pro conference, Sima Yunrui, vice president of Coolpad, once said that system research and development innovation will be one of the boosts for Coolpad to achieve cornering overtaking in the future. On both released smartphones, Coolpad uses its self-developed operating system, COOLOS. In the financial report, Coolpad said that the company has applied for more than 14,000 patents in the field of communications, and will continue to increase the research and development of COOLOS and investment in the operating system kernel in 2022.

As we all know, technology research and development needs huge financial support. In 2021, Xiaomi's R&D expenditure reached 13.2 billion yuan, an increase of 42.3% year-on-year; Huawei's R&D investment in 2021 reached 142.7 billion yuan. However, in contrast, Coolpad's R&D cost expenditure in 2021 was HK$162 million, which was HK$48 million less than the HK$210 million invested in 2020.

In the user evaluation of the e-commerce platform, many consumers complained about the Coolpad mobile phone, saying that its system optimization was poor, many functions of the UI were missing, and the status of the screen appeared from time to time. Li Dong, who just started the COOL 20 new machine, told Caijing Weekly that he felt that some functions in the mobile phone were castrated badly, "Like some of the vibrato special effects cannot be used, there is no red envelope assistant, and typing too fast will be delayed." ”

"I bought a second-hand new machine online, and the other party resold it at a low price before it was dismantled." I now use it as a backup machine, usually call can be, but I feel that in the choice of products at the same price, the system of Honor and Redmi mobile phones will be much better. Li Dong said.

In fact, the low-end market that Coolpad chooses to invest in is not a "clear stream", but has also fallen into the red sea of price wars.

Image source/Visual China

Since 2020, due to the continuous downturn in mobile phone industry shipments in recent years and the increasingly anxious market competition, domestic mobile phone manufacturers have fallen into the pressure of "multi-inventory". According to the report of Guo Mingxi, an analyst under Tianfeng International, during the Spring Festival in 2020, the shipment of mobile phones in the domestic market declined by 50% to 60%, and there was about 50 million to 60 million "high water level" inventory in the channels, including Huawei, Xiaomi, OV, etc.

Major mobile phone manufacturers have launched a price war to destock, and even Apple is not exempt. In recent years, Apple products have also put down their "body", and online channels have begun to reduce prices sharply. Last year's "Double Twelve", on the Jingdong direct sales channel, the iPhone 12 fell by 500 yuan.

The sinking market has also become a must for major mobile phone manufacturers. At the end of 2021, Lu Weibing, a partner of Xiaomi Group, announced that the overall goal of 30,000 millet homes will be achieved in the next three years, mainly focusing on the sinking county and town markets. Li Jie, president of OnePlus China, also said in an interview a few days ago that OnePlus mobile phones will enter 2,800 counties in China this year.

Still, phones are increasingly unsold. According to a report by the China Academy of Information and Communications Technology, in February 2022, the shipments of mobile phones in the domestic market and domestic brands fell by more than 30% year-on-year.

More and more consumers are losing their desire to catch up with new machines. Despite the importance of cost performance, many young people also said that they do not want to be "cheap" when buying mobile phones.

After 95, Cai Jia told the "Finance and Economics World" Weekly that she believes more in "one penny for one price", rather than buying a cheap mobile phone that "throws it away and does not hurt", it is better to spend a relatively expensive price at the beginning to buy a suitable and longer-lasting product, which is rational consumption and the real cost performance.

Even a veteran user of Coolpad, Wei Zhe agrees with this view. He said: "In fact, if Coolpad really does a good job, it is not impossible to support, but I do not want to change the demand for an extremely cost-effective mobile phone." ”

Can "Xiaomi Second" emerge in the sinking market?

Ten years ago, Xiaomi, which played the banner of "let everyone enjoy the fun of science and technology", officially began to sell the first generation of Xiaomi mobile phones on the Internet, and with its cost-effective positioning, successfully harvested a number of "rice noodles". Now, cool people who also return to the market with cost performance as a selling point have more or less the shadow of Xiaomi in their strategy.

Before the official announcement of the return, Coolpad had issued an announcement that from October 8, 2021, Qin Tao was appointed as the senior vice president of Coolpad Group, and Hu Xing, Li Yujing and Sima Yunrui were appointed as vice presidents of Coolpad Group.

It is reported that these four executives have previously worked in Xiaomi. For example, Qin Tao was the general manager of Xiaomi's channel innovation department, and later participated in the formation of the group staff department; Li Yujing served as the product director of the mobile phone department and the director of the group staff department in Xiaomi, responsible for the Redmi mobile phone product line planning and other businesses, known as the "father of Redmi Xiaojing" in the circle; Hu Xing was responsible for the e-commerce channel and new retail innovation channel business in Xiaomi; Sima Yunrui once served as the head of the big data department of Xiaomi's artificial intelligence and cloud platform.

In addition, Song Jiuya, president of the cool mobile phone department who operated the COOL 20 Pro, served as the product manager of the mobile phone department in Xiaomi, and single-handedly created the Xiaomi 10 Youth Edition, helping the Xiaomi series to stand firm in the 2000 yuan file.

From hardware, software, channels, and supply chains, Coolpad has gathered Xiaomi's talents and has the potential to re-create a "Xiaomi model". However, ten years have passed, the mobile phone market has long been changed for a star, and some people in the industry are not optimistic about whether Coolpad can "turn over".

"The flip is not enough, it is more of a 'small fight'." An offline mobile phone seller in Beijing told Caijing Tianxia weekly bluntly, "Now even xiaomi is difficult to sell, let alone other brands." In the mobile phone market, the emergence of a millet can, and later imitators basically can not become. ”

The hundred-yuan machine and the thousand-yuan machine are mainly facing the sinking township market, and in this market, the layout of offline sales channels is particularly important. When Qin Tao was in Xiaomi, he launched the "Xiaomi Small Shop" in 2017, mainly relying on individual franchises, even if there is no physical storefront, he can join in selling Xiaomi products in townships and towns, which are directly supplied by Xiaomi.

However, at that time, Xiaomi's offline channel system was not mature, the sales and channel capabilities of franchisees in the small shop model were uneven, coupled with the low rebates given by Xiaomi, only 2%-5%, and many franchisees left the market because they could not make money. Xiaomi Xiaodian eventually failed, and did not lay the county town for Lei Jun. In 2019, Qin Tao also left Xiaomi.

Now, Coolpad mainly promotes the model of offline service stations. It is understood that different from the agency and distribution model of traditional mobile phone offline channels, Coolpad divides the national market into more than 30,000 grids, manages service sites through digital systems, establishes a direct supply model, and the "webmaster" is responsible for managing product sales in the entire area. In addition to enjoying the commission of mobile phone sales, "webmasters" can also receive Internet service revenue and MAU incentives.

According to the financial report, as of December 31, 2021, Coolpad has established more than 3,200 authorized service stations in China, most of which are distributed in counties and townships in lower-tier cities.

Liu Xu, head of Coolpad Investment Promotion, told The Finance and Economics Weekly, "At present, the premise for merchants to join is to have their own stores, the urban area has not yet opened service stations, it is still being tested, and it is only facing counties and townships." Authorized service stations are packaged to merchants according to the county or town, and the corresponding deposit is set according to the different population of the area, that is, the deposit. Generally speaking, the deposit amount is around 10,000 yuan, and the corresponding credit limit of 8500 yuan is matched, that is, the goods. ”

Liu Xu stressed that the credit sales quota obtained by the merchant must be repaid once within three months. That is to say, the goods need to be sold for the corresponding payment, but how much goods are taken away depends on the merchant's own arrangement, and the credit sales quota can be recycled. At the same time, the deposit will be refunded in full after the merchant's partnership is terminated.

"The biggest advantage of the Coolpad channel model is the omni-channel rebate. We hope to do 'retail + distribution' through webmasters in various regions. Every time we sell a mobile phone, we will rebate the region, according to the different versions of the mobile phone model and the number of sales units, the maximum rebate can be up to 600 yuan, and the next month on the 15th of the unified settlement. If it is distribution, for every mobile phone sold, we will directly return 100 or 150 yuan in the form of cash or red envelopes. Liu Xu said.

In addition, Internet revenue was also highlighted by Liu Xu. "As long as the Coolpad mobile phone is successfully sold at the terminal and there is traffic generation, it will share the Internet revenue with the regional webmaster, and as long as the mobile phone is used during its lifetime, it will settle the rebate." Some of the merchants who entered in November last year have already received nearly 2,000 yuan in just 4 months. The earliest merchants in the Hebei area also have no shortage of Internet revenues of more than 10,000 yuan. ”

However, for Coolpad's large concessions, Ms. Wu, a county-level mobile phone store in Sichuan, said that she still had to wait and see at the same time. "The current mobile phone market is still quite difficult, even Xiaomi is not easy to sell, Coolpad is even more difficult to say." Several xiaomi stores across the street from here are closed. It turned out that I was selling dozens of stores a month as a specialty store in the township, and now the stores opened in the urban area may not be necessary. She said.

Mr. Niu, who is also in charge of a communication store in Sichuan Township, introduced that now everyone is basically online shopping, and mobile phone sales have been falling down in recent years, basically dropping 10% to 20% per year, "This year's sales are still declining, coupled with the epidemic, the basic offline stores are not many people." ”

Compared with the welfare, Ms. Wu and Mr. Niu are more worried about whether their deposit will be lost if they can't complete the sales task. "In reality, there are many consumers who shop around and bargain, which will give a discount to profits, plus rent and labor costs, and we can't make much money." Moreover, a small brand like Coolpad, if the consumer has more after resale, it is also a troublesome thing for the merchant. ”

"Compared with competitors in the same industry, Coolpad's advantage is still too weak. And the dividend period of Internet sales has passed, and the construction of offline channels, if there is no investment of billions of yuan, it is impossible to do it. Liang Zhenpeng, a veteran industrial economic observer, told Caijing Weekly.

Why does the "second generation of real estate" want to save Coolpad?

Coolpad was also a hit. In 2004, Coolpad became famous for launching the world's first dual-mode mobile phone Coolpad 858, and the sales of Coolpad 858 exceeded 1 billion yuan that year. In the same year, Coolpad was listed on the main board of Hong Kong, and was once called "China's future BlackBerry" by the industry.

After that, catching up with the dividend period of mobile operator subsidies, Coolpad became a partner of the three major domestic operators, ranked among the forefront of domestic mobile phone manufacturers, and was called "China Cool Union" with ZTE, Huawei and Lenovo at that time, occupying half of the domestic mobile phone market.

According to market research company Sainuo data, in May 2014, in the domestic 4G mobile phone market, Coolpad had a market share of 23.1%, beating Samsung and Apple, ranking first. In 2014, Coolpad's performance also reached an all-time high, with revenue and net profit of 24.9 billion yuan and 411 million yuan, respectively.

But the good times are not long, with the rise of millet, operators have reduced the subsidies for customized machines, and cool factions that rely too much on operators have also fallen into a dilemma. After 2014, Coolpad's revenue began to fall off a cliff, falling 37% in 2015 and 42% in 2016.

"The fundamental reason why Coolpad can't continue is the huge inventory generated after operators stop subsidies." In the China Cool Alliance, only Huawei is relatively strong, does not follow the operator route, has its own rhythm, and survives in the mobile phone market. Sun Yanbiao said that Coolpad's brand recognition among consumers has not risen, basically relying on operators to support, "there are subsidies to be willing to buy, and brands that do not buy are not called brands." ”

Coolpad founder Guo Deying decided to transform and "bind" with Internet companies. In 2015, Coolpad and Zhou Hongyi, founder of 360 Company, joined forces to establish a joint venture company, Qiku Internet Network Technology (Shenzhen) Co., Ltd., and classified Coolpad's "Big God" series of products into Qiku.

But in June 2015, Coolpad sold another 17.92% stake to LeEco. The enraged 360 company filed a huge claim of $1.485 billion to Coolpad according to the relevant agreement of the joint venture, and the two sides fought a "war of words" and finally ended with Coolpad losing control of Qiku.

In 2016, LeEco took a 29% stake in Coolpad and became its largest shareholder. In August 2016, Guo Deying resigned as chairman and CEO of the group, and Jia Yueting became the chairman of Coolpad.

But the misfortune is that at the end of 2016, LeTV broke out of the capital chain crisis, Jia Yueting took care of himself, and naturally had no intention of managing Coolpad. In this year, Coolpad's revenue was only HK$7.129 billion, compared to HK$14.668 billion in the previous year, and for the first time, it had an annual net loss of HK$4.401 billion. Coolpad was forced to abandon the domestic mobile phone business and began to turn to the main overseas market, fading from the public's vision.

At the beginning of 2018, Weiri Venture Capital, the second son of Chen Jiajun, the founder and chairman of Kingkey Group, acquired 17.83% of the coolpad equity transferred by LeTV, becoming the largest shareholder of coolpad. The following year, Chen Jiajun became the executive director and president of Coolpad. After taking over Coolpad, Chen Jiajun began to use various measures to improve liquidity, including the sale of Coolpad's land assets. In April 2019, Coolpad Group issued an announcement that it would sell the land use right of a plot of land in Xi'an for 236 million yuan. In this year, Coolpad ended three consecutive years of losses and achieved profitability.

In addition, as of the end of 2020, Coolpad has also mortgaged investment real estate with a book value of HK$1.698 billion and BUILDING fixed assets of HK$115 million.

According to public information, in the era of Guo Deying, Coolpad purchased a large number of land assets, including the Coolpad Information Harbor plot of Shenzhen Nanshan High-tech Industrial Park with an area of more than 30,000 square meters, as well as the songshan lake plot in Dongguan and the plot of Chang'an Industrial Park in Xi'an, with a value of more than 10 billion yuan. Therefore, there have also been voices in the outside world questioning that The acquisition of Coolpad shares by Beijing Base Real Estate is eyeing these land resources.

To this end, Chen Jiajun once explained to the outside world that the price of Coolpad land is not as large as the outside world imagines, and land such as the newly built Coolpad Building is a fixed asset of listed companies and cannot be sold to the outside world. "It's just that land can thicken assets for listed companies and bring certain cash flow."

In an interview with the media, Chen Jiajun also said that he took over Coolpad because he was interested in mobile phones, and felt that in the history of domestic business, there were not many people who could revive a technology company on the verge of bankruptcy, which was a particularly challenging thing.

Interestingly, in the poster of the press conference last December, Coolpad also shouted Jia Yueting: "In recent years, we have not only filled in the pit you left behind, but also built a new Coolpad building, and when you return to China next week, welcome back to see." ”

"Coolpad can be successfully sold without the land resources it owns." With the development of 5G and the advent of the Internet of Things era, mobile phones will become an important entrance to the Internet of Everything, and when the real estate industry is not easy to do, joining the mobile phone business may burst out more possibilities. Sun Yanbiao said.

But he also believes that the domestic mobile phone market has entered the stock competition, "can not easily return, once re-entered means a huge investment, and if blindly looking for the concept will fall into the cycle of constantly burning money and constantly losing money." ”

There are not a few mobile phone brands that want to eat Huawei's "fall" dividend, and among the four major brands that were once "China Cool Union", not only Coolpad, Lenovo and ZTE have also re-stood on the table. In the eyes of industry insiders, Coolpad is not dominant compared to them. "Like ZTE, although the development has been slow in recent years, it still has a large part of the 2B business, and its overseas low-end custom machine business is also doing well." In contrast, Coolpad has very little choice. Liang Zhenpeng said.

At present, instead of breaking through from the mobile phone market battle, Coolpad may first solve the problem of how to "stand firm" in the low-end market.

(At the request of the interviewees, Wei Zhe, Zhang Wei, Xu Meng, Li Dong, Cai Jia, and Liu Xu were pseudonyms)