Depth report

　　

OPPO, which broke out in the Chinese smartphone market in 2016, made consumers feel a clear stream. "Think what they think" to create an experience for young people; "With where they are", it appears in all media that young people pay attention to. And the advertisements all over the street show the people-friendly feelings of this consumer electronics "upstart and veteran".

    In the eyes of competitors, OPPO's channel battles, personal promotion by promoters, and the younger and fashionable dissemination of products also make everyone rethink the essential laws of consumer electronics.

    In the competitive atmosphere of Apple's high-end innovation, Samsung's three-dimensional product line selection, and Huawei's high brand potential, OPPO's strategic play looks simple, direct and can capture the minds of consumers very well, while also having actual competitiveness.

    Through first-line inspections and investigations in more than a dozen cities in Indonesia, Vietnam, and Myanmar, we found that OPPO poses a strong challenge to Samsung in Southeast Asia. At the same time, this is also the sharpest attack for Chinese consumer electronics in foreign markets.

Strategic determination

    Sometimes war requires untimely paranoia.

    In the fall of 2013, Jacky, the head of OPPO Vietnam, said to Tom (pseudonym), the boss of the mobile world who controls 40% of the mobile phone retail market in Vietnam: As long as you let OPPO into the store, we can provide a profit margin of 2 million US dollars, and you will not lose money.

    Tom later recalled with the people around him: Although they have seen Samsung's big hand, they still have respect for the young OPPO executives who are not familiar with them.

    Jacky, who walked out of the negotiation room, ordered his subordinates to expedite a total of 17 million U.S. dollars in Vietnamese advertising and express his sincerity with fierce gunfire. Mr. Ruan, a local employee who once worked at OPPO, commented: The courage of the boss comes from experience and determination, but at that time more people thought it was gambling.

    The language of business is often so simple and straightforward, and it doesn't require much speculation. In fact, before deciding to enter the Vietnamese market, the leading team of OPPO Jiangsu channel partners who "contracted" Vietnam to inspect Vietnam for a year, and asked a third-party company to do professional market research. OPPO came prepared, but aggressively.

    Finally, Tom was moved by Jacky's sincerity and agreed to OPPO's three conditions, namely booth entry, image entry, and promoter entry. Especially at the point where promoters enter the market, the mobile world has set an unprecedented precedent. OPPO's persistence has made the executives of the mobile world full of expectations. They want to understand the gameplay behind large investments.

    Since then, OPPO has added millions of dollars in image investment to obtain strategic resources such as doors, advertising spaces, and posters in the mobile world. Within three months, 600 promoters "like wolves like tigers" entered 300 stores across the mobile world. OPPO entered the Vietnamese market in such a big way. Without any hesitation or doubt, the instructions from the big domestic boss to Jacky are only four words: the sooner the better!

    "The bright sword is the safest and the most reliable attack. It is the battlefield that can smell blood every day", a former OPPO director in the Vietnamese market said with emotion. As a member of OPPO, he was familiar with and admired OPPO's style of play.

    "In the consumer electronics battlefield, three weeks determine the success or failure of a new product, and six months determine the life or death of a brand. Indeed, there is no room for hesitation and sway." He said.

    Indeed, the competition of smartphones in Southeast Asia is more brutal than domestic. The number of mobile phone brands in the Southeast Asian market is almost 2-3 times that of the domestic market (there are 28 mobile phone brands in Marino, the largest high-end mall in Surabaya, Indonesia). Sony, LG, and Asus, which have already withdrawn from the competition in the country, are still stubbornly resisting in Southeast Asia. 5 to 10 domestic and Indian brands (their products are from Design House in China).

    "Indonesia has 300 million people, the Philippines and Vietnam each have a population of about 100 million, and Myanmar has 60 million. If you add 1.3 billion in India and 1.4 billion in China, OPPO will capture the emerging markets of China and Southeast Asia, which have a population of nearly 3 billion in the world. The competitive advantage of developed countries in the world is entirely possible", this is the anxiety of a Samsung executive. Worrying is not redundant. From January to September 2016, OPPO's market share in Indonesia has risen from 7.2% to 16%.

    Of course, Rome was not built in a day. OPPO's aggressive attack in Indonesia originated from Li Jie, a man in the OPPO system.

    In 2011, Li Jie took the initiative to invite Ying to explore the market in Indonesia. It is said that he took the bag and set off on the third day after he got his passport. After arriving in Indonesia, he was assigned an interpreter and began to investigate the market in depth. After that, he brought more than a dozen city-level dealers from the country, each with a local Indonesian translator. From scratch, rooted in Indonesia. The achievements of market development in the third and fourth tier cities in Indonesia mentioned above should be attributed to this OPPO’s first international champion. OPPO’s feelings like Li Jie are circulating inside the OPPO. After going to many remote markets, I really don’t want to go to the first place. Twice.

    It took Li Jie 4 years to increase the market share of Indonesian OPPO from zero to 10%. According to the latest data, OPPO's market share reached 16% in Q3 2016, second only to Samsung's 33%.

    The Titan Li Jie is not an isolated case. In the Vietnamese market, OPPO has organized many people like Li Jie and they are surprisingly young. Moreover, most of OPPO's executives entered the company after graduating from university and were promoted level by level after rotation. Their loyalty and trust to the company exceeded most of the loose teams of competitors. In the OPPO system, the reason why the generals and soldiers can charge and fight like chicken blood, and even pay for the company’s marketing communications, is actually very important because they are really fighting a "people's war", Gao Tubes all stand out from the masses of the people. The company provides opportunities and ways to every young man who is eager to make contributions, just like "playing local tyrants and dividing fields", and then cooperate as a kind of friend to create business miracles together.

    "And for international companies like Samsung, they are more or less senior, and Samsung rarely entrusts local executives with important tasks." This is the perspective of a domestic smart phone industry insider.

    The most essential logic of any complex business war is actually human competition. When OPPO was fighting this people's war, it found generals from the masses of people, eclectic, and at the same time worked hard to benefit more people.

    Comparing many industries, all category promoters involved in important decisions for consumer brands are one of the decisive forces. For example, domestic high-end brands such as boss range hoods, mousse mattresses, and Oupai cabinets all attach great importance to strong terminal promotions.

    OPPO's play style is unprecedented in the Vietnamese market. These down-to-earth and enthusiastic market play, coupled with the aforementioned large advertising budget and display investment, enabled OPPO to gain a 10% market share in the first year of entering the Vietnamese market. In the second year, OPPO fully entered the four largest KA (chain distributors) in Vietnam and obtained 90% of the market display coverage in Vietnam. As of September 2016, OPPO's market share in Vietnam has reached 23.8% (Samsung 38.5%), and F1s single product sales are 156,000 units, almost twice the sales of Samsung's models in the same gear.

    Above, we can feel that OPPO's success in the Southeast Asian market relative to Samsung is not simply a copy of the domestic successful play, but also a full catch-up of work efficiency and market efficiency. The Southeast Asian market in the smartphone war is highly similar to domestic third- and fourth-tier cities, but the OPPO camp is very flexible. For example, in the Indonesian market, OPPO is mainly based on retail channels and retailers (agents) in hypermarkets, while in Vietnam, it is based on the four major KA (large customer channels). However, the unchanging soul of OPPO's play is centered on "people The mobilization ability of "war".

Localization and integration

    In Jakarta’s largest IT wholesale store ROXY MALL (similar to the early Hailong Building in Zhongguancun), OPPO has taken a large amount of exposed advertising resources, and it is easy to be attracted by the green after entering the store. Sometimes, after many consumers who plan to buy Samsung come in, they will temporarily change their minds and include the green OPPO in their selection.

    OPPO currently has a 16% market share in the Indonesian market. After four years of strategic investment, it has entered a market harvest period. Based on their strategic thinking on consumer electronics in mainland China for more than ten years, OPPO firmly roots in a new country, integrates with the people of this country, and firmly cooperates with local channels and entertainment circles to show the sword, either life or death , Running desperately.

    They are sponsored by the Grand Slam in Vietnam. It is said that at the beginning of each year, they will discuss New Year cooperation plans with major Vietnamese entertainment stars. They are very localized and grounded, and do not have the shelf and paradigm of an international company like Samsung.

    However, with the above-mentioned generous and record, there is no sign that OPPO has fallen into pride and enthusiasm.

    "OPPO does not proudly think that it has discovered the ultimate winning weapon on the battlefield, but is a little bit unconfident, feels that there is not much to say, and is full of a sense of crisis." An OPPO partner said.

    In the research conducted by the strategy consulting team of Zhou’s strategy consulting team in Southeast Asia, they also found many differences in the details of the market in multiple countries, as well as the fundamental differences in the different levels of the market in a country. This shows the complexity of the Southeast Asian market and the attack on Samsung by latecomers like OPPO. The difficulty.

    For example, the following market characteristics are very obvious:

    Consumers in the Myanmar market generally hope that the back of mobile phones will be displayed when they are displayed, because they feel that the front is the same and there is no difference; when Indonesian consumers buy mobile phones, they want to sit at the counter and have an in-depth conversation with the promoters because they Think that buying a mobile phone should not be impulsive consumption;

    Women in Southeast Asian countries such as Vietnam generally have darker skin, and travel is not common due to the level of consumption. They like selfies with the front camera, and they are very concerned about the enhanced whitening effect in selfies (while R&D engineers of other brands think that the camera is better for taking pictures. Authenticity comes first); generally, the avatar of the selfie will be changed every two or three days, which is almost the same frequency as that of Chinese consumers in the Moments;

    In Vietnam, 40% of the mobile phone is paid in installments, and the bank installs 3% of the cost to be borne by the manufacturer. Many young people buy mobile phones and sell mobile phones to cash out from banks. This allows Vietnam, an emerging market with more than 40% of the population under the age of 24, to have a stronger consumption momentum than the population and purchasing power assessment results;

    If you want to understand and respond to these localization features well, mobile phone manufacturers must have a good localization strategy and be willing to adjust their products around consumers. This is essentially the same as the special camera phone for black people developed by Transsion in Africa. Only by solving the pain points locally can it be recognized by local consumers.

    In fact, the so-called "OPPO play" is not complicated and difficult to understand. As shown by OPPO's "duty" thinking, OPPO is a very simple and transparent company, and the "traders" behind it are all consumer electronics veterans who have been the bully since 1996. When OPPO was founded in 2004, considering the needs of globalization, it decided to establish a brand in the United States and register a trademark globally. They decisively abandoned the obsolete BBK brand and redesigned the brand according to the characteristics of consumer electronics. Their simplicity today is also due to their long-term practical exploration and selective reduction of complexity to cope with frequent changes in the market environment.

    The competitiveness of consumer electronics, especially the smartphone industry, is reflected in the "three major battles": the first is the battle for product quality; the second is the battle for brand potential; the third is the cash flow operation Tough battle.

    To put it simply, OPPO's style of play makes three money through three tough battles, and competes for market dominance through the "three battles". The first is the product battle to obtain product sales profits. In this regard, OPPO is soberly aware that consumer electronics giants must produce high-premium products, abandon price wars, and focus on "dessert stalls." Therefore, in the Southeast Asian market, the average unit price of OPPO products sold is 20% higher than that of Samsung in general, which is close to the high profit obtained by Xiaomi's early high-profile hunger marketing pre-sales. The second is the brand battle to obtain investment income from brand investment. By predicting the benefits of media in advance, for example, OPPO’s initial investment in entertainment programs is 10 million yuan, and the value may reach 100 million yuan after the program’s ratings increase (other brands need to pay a high threshold fee for this program). The difference of 90 million is actually indirectly converted into OPPO's profit. The third is the battle of cash flow operations to obtain financial gains. By absorbing funds from the industry chain, it has improved the efficiency of its own capital use, and has achieved benefit binding to downstream retail partners. In an interview in Indonesia, a local retailer said: “OPPO requires cash settlement to speed up capital turnover. As a result, Samsung, which is dominated by the entire Indonesian market, uses its own cash flow to support OPPO’s operations through distributors.” OPPO's cash flow and return to scale can be seen.

    OPPO is not perfect. "Product sales profit", "brand investment income" and "cash flow operating income" are all very easy to do, but it is compatible with Samsung's quality control capabilities, screen memory hardware production capabilities, chip research and development capabilities, patent layout capabilities, and batteries. Compared with basic research and development capabilities, they are all on the surface of competition.

    In the Southeast Asian market, from the overall perspective of OPPO and Samsung’s strategic confrontation, Samsung still has an overwhelming advantage. As long as Samsung adapts to OPPO’s play style and adapts to jungle combat, it will be close to the OPPO hinterland. The "Three Great Battles" are in full swing. For manufacturers such as OPPO and Samsung, it is also a competition between "cognitive laws" and "cognitive people".

    The Southeast Asian market is very similar to the Chinese market, and it is also a potential market with densely populated developing populations. However, because the markets in many countries are too fragmented, it also brings great difficulty to the offensive of Chinese brands. Whether OPPO can surpass Samsung in Southeast Asia is still a question of suspense.