By Han Lei
Many people’s jaws may drop at the recent findings on China’s Q3 smartphone market from Hong Kong-based analysis firm Counterpoint Research. Vivo and Oppo, which are brother companies from the BBK Electronics Corporation, took over Huawei’s top spot, becoming the best-selling smartphone makers in China. Respectively, Vivo and Oppo occupied 16.6% and 16.2% market shares, while Huawei’s share plunged down to 15%. Huawei released its star product, the P9 series, which have proved popular among its customers. Still, Huawei seems to be losing the battle to battle to Vivo and Oppo. Here is why.
Offline store strategy
Both Vivo and Oppo have focused on offline stores for years. They are very willing to develop franchisees, and they’re able to give high profits to those franchisees. They agree to take back older models of smartphones, and exchange a portion of its money value towards the next product order for franchisees. They provide significant bonuses for the best selling franchisees.
Oppo has operated over 200,000 offline stores around China, as of 2016. They initially focused on urban markets, but also they have started to expand out to cover more rural markets.
Cheaper but not cheap
Vivo and Oppo are aiming to manufacture mid-range smartphones. They are following the most updated Android operating systems, carrying mid-to-high level hardware. For example, the Vivo X7 series uses Qualcomm MSM8976 Snapdragon 652 chipsets, Octa-core CPU, internal 64 GB storage, 4GB RAM, and has a 1080 * 1920 pixels resolution, all in a phone selling for around USD 400. Those technologies are not cheap, but this price is much cheaper in comparison to Samsung, Apple and even the Huawei P9 series.
Vivo and Oppo have successfully used “star impact” to push their branding. Both of them have sponsored many events: sports, variety shows, TV dramas, and movies. They are hiring the hottest pop stars to be their spokespersons. These marketing strategies have paid off well for both Vivo and OPPO.
Knowing the value of offline marketing, building the “Cheaper but not Cheap” smartphones, and harnessing star impact, Vivo and Oppo are beating down the big three of Samsung, Apple, and Huawei in China 2016. If they maintain the momentum of their success, they will have a very bright future and could become market leaders for a long time in China.