Offline War Between OPPO and Xiaomi

5 min read 

After 16 months in development, OPPO’s first super flagship store opened on Huaihaizhong Road in Shanghai beside brand stores such as Zara and Urban Revivo. The flagship covers nearly 500 square meters, more than half of which is a recreational area.

There are three spacious black-pebble seats and two long tables displaying OPPO’s flagship phones. Shelf merchandise includes Beats headphones, DJI UAVs, BOSE sound and the Star Wars BB-8 robot.

“Compared with other regions, OPPO’s brand influence and appeal in first-tier cities is not satisfying,” OPPO Vice President Wu Qiang said. He told Chinese Entrepreneurs that most stores on Huaihai Road in Shanghai were not profitable. Their main function is to improve service and brand awareness. Sales is not the goal. OPPO reportedly invested 10 million yuan in the Shanghai super flagship store before opening.

Since last year, OPPO has significantly increased its investment in brand marketing in first-tier cities. “We have been operating in first-tier cities. It is just that we can do a better job in a third- or fourth-tier city,” Wu Jiang said.

At a meeting in Guangzhou, OPPO made clear its proposal to open more stores in first-tier cities. A senior OPPO executive at the meeting said, “It’s an exclusive store, like Apple.”

It’s hard for OPPO to make its way to first-tier cities like Beijing, Shanghai, Guangzhou and Shenzhen. “Previously, OPPO treated first-tiered cities the same as other cities, with the same resources and policies.” Wu said in the interview with Chinese Entrepreneurs. He reflected errors in layout in first-tier cities.

OPPO’s super flagship scouted out many first- and second-tier cities. In addition to the Shanghai store, a second location in Shenzhen has been confirmed, and site selection in Beijing and other cities is in the works.

Since 2017, opening stores has become an important step for handset makers. In November, Xiaomi opened its world’s first flagship store in Shenzhen. Unlike OPPO, its two-story store is nearly 600 square meters and it sells 400 Xiaomi products. The abundant products make it a comprehensive shop. One commodity may not be purchased frequently, but hundreds together could upgrade rare consumption into frequent consumption.

Wu strongly believes that OPPO’s flagship store aims to improve the brand image and user experience, rather than improving the area effectiveness. OPPO will not take a multi-category route unlike Xiaomi or apple. As for introducing third-party products, OPPO will choose a product that is comparable to its brand, or slightly stronger. At present, the SKU of OPPO Shanghai flagship store is around 30, and will continue to enrich the product category in the future.

Wu explained OPPO’s channel strategy. So far, OPPO has more than 250,000 channels throughout China, with a large proportion of stores located in third-tier or fourth-tier cities. “Previously, people thought more shops meant more power. But in fact, too many shops at a low level leave a bad impression on users.”

As for improving brand image in such stores, Wu was strongly against the “one size fits all” mode. “It will be a dynamic process instead of sudden shrink from 250,000 to 200,000,” he said. In the future, OPPO will adopt the model of hierarchical management on channels, optimize small stores, weed out stores in remote areas or in bad business. OPPO will minimize numbers in this aspect and will have more super flagship stores,” he said.

Apart from the super flagship store and numerous third-party stores, there are more than 1 million exclusive stores and flagship stores, accounting for 10 percent of the total sales in China. Wu said he did not deliberately plan the layout of exclusive stores and flagship stores and will not increase their proportion in the retail landscape.

“The domestic phone market has changed from pyramid type to T type, and it’s not easy for any company to knock over another one.” According to Counterpoint, Huawei, OPPO, Vivo and Xiaomi account for more than 70 percent of the Chinese market. Wu said in this competition the most important thing for OPPO is not to make mistakes.

The domestic mobile phone industry has entered the stock market. The shipment growth of Xiaomi, Huawei and OPPO is due to increasing overseas sales. Currently, OPPO’s overseas sales accounts for 30 percent of its total. Wu said Chinese mobile phone manufacturers will speed up their expansion overseas. And OPPO will explore other overseas markets, such as Russia and Japan, in 2018 after expanding in existing Southeast Asian markets and India.

“We shipped 98 million handsets last year. Domestic sales are up by more than 10 percent this year, and overseas growth is more than 20 percent,” Wu said. At that rate, OPPO will ship more than 120 million units in 2017. Wu said the industry will remain at the current scale next year, but perhaps with a small decline.

Over the past two years, OPPO only launch one R-series flagship per year. This concentration brought significant advantages. However, after dominating the 3,000-yuan price point, OPPO doesn’t have a handset with a higher price. One industry source said, “If the mobile phone manufacturer wants to do a good job in first-tier cities, it needs to gain a foothold in the 4000 to 5000-yuan range.”

A consensus in the mobile phone industry is that there will be no major changes in either vendor shipments or major manufacturers before 5G arrives. Full screen is the theme of the second half of 2017. As experience is limited, there is no large replacement. Wu said full screen phones, lower-screen fingerprint recognition and artificial intelligence are the three technologies mobile makers will target next year. For the new technology, OPPO always prefers stable solutions, he said. “New technology only meets the needs of specific groups, so OPPO will not mass produce such products. OPPO hopes each of its products can meet the needs of the general public,” Wu said.

This article by Li Yating originally appeared in China Entrepreneur and was translated by Pandaily.
Spread the love
  • 32
    Shares
66 comments Add yours
  1. I will immediately take hold of your rss feed as I can’t to find your e-mail subscription hyperlink or e-newsletter service. Do you have any? Kindly permit me realize in order that I may just subscribe. Thanks.

  2. I think other web site proprietors should take this website as an model, very clean and magnificent user friendly style and design, as well as the content. You are an expert in this topic!

  3. Oh my goodness! an incredible article dude. Thank you Nevertheless I am experiencing concern with ur rss . Don’t know why Unable to subscribe to it. Is there anybody getting an identical rss drawback? Anybody who knows kindly respond. Thnkx

  4. I’m really curious to understand which website platform you have been utilizing? I’m having some minor security issues with my latest site dealing with best way to get instagram followers and I would like to find a thing much more secure. Do you have any alternatives?

  5. Howdy I am truly thrilled I discovered your blog page, I basically found you by error, when I was browsing on Google for commercial real estate for lease. Anyhow I am here right now and would really love to say thanks for a marvelous blog post and the overall entertaining site (I too enjoy the theme/design), I do not have enough time to look over it completely at the moment yet I have saved it and even added in the RSS feed, so once I have plenty of time I will be returning to read a lot more. Please do continue the fantastic work.

  6. Howdy! This is my first reply on your site so I really wanted to give a fast hello and tell you I genuinely enjoy reading your articles. Can you recommend any other websites that deal with forex auto trader? I am as well extremely hooked on this! Many thanks!

  7. You’re totally right and I definitely agree with you. If you want, we could as well talk about environmental jobs network, something which fascinates me. The website is great, cheers!

  8. I’m really interested to understand just what blog platform you are using? I am experiencing a few small protection issues with the most recent website related to best real estate websites so I’d like to find a thing a lot more risk-free. Are there any strategies?

  9. Admiring the time and energy you invested in your blog and in-depth facts you display. It really is amazing to come across a website once in a while that is just not the same outdated re-written information. Awesome read! I’ve saved your website and I’m including your RSS feeds to my inhaled corticosteroids website.

  10. I’m truly enjoying the design and layout of your website. It’s a very easy on the eyes which makes it much more enjoyable for me to come here and visit more often. Did you hire out a developer to create your theme? Superb work!

  11. Many thanks for your great write-up! I definitely liked it.I will be sure to save your blog and definitely will return in the future. I want to suggest you to definitely keep going with the great job, possibly discuss packers and movers as well, have a great evening!

  12. I am actually enjoying the theme/design of your website. Do you ever run into any kind of browser compatibility problems? Quite a few of the blog visitors have lamented regarding my excel courses online site not working properly in Internet Explorer though seems great in Firefox. Have you got any kind of solutions to assist fix that issue?

  13. I am seriously loving the design of your information site. Do you encounter any browser interface issues? A number of the blog readers have complained about my new home plans site not operating the right way in Internet Explorer though seems wonderful in Chrome. Do you have any kind of ideas to assist repair that situation?

  14. Spectacular beat! I’m going . bulk sms forumto apprentice concurrently when you change your blog, the best way could my spouse and i sign up for a blog page web site? The particular account made it simpler for me a acceptable offer. I had been tiny bit comfortable with this your broadcast presented outstanding translucent concept

  15. Thanks for your terrific post! I really enjoyed it.I will ensure that I save this blog and will return later on. I wish to suggest you to ultimately continue your excellent job, even write about red light ticket too, have a good morning!

  16. Thank you for discussing the idea, I bookmarked the website. I am furthermore in need of details around parking violations, do you know exactly where I might discover something like this? I will return soon!

  17. Hey! This is my very first reply here so I just wanted to give a fast shout out and tell you I really enjoy reading your posts. Can you recommend any other blogs which deal with card numbers that work? I am also extremely fascinated with that thing! Many thanks!

  18. ANPC is a free nation for and by the living men and women of the earth. This Private Nation is a grassroots association based out of Indonesia having its own International Charter, Peace Treaty, Constitution, Rules of conduct and has adopted the Declaration of Human Rights. These Treaties have been Registered by International Notice to the Hague and World Court as well as other agencies worldwide. The entire goal and mission of ANPC is WORLD PEACE and freedom for all the nationals of the world, focusing on a peaceful gathering together of all tribes and nations. Our living men and women are to live as Peaceful Inhabitants on the land, striving always to create a better world today and for future generations.

  19. diabetes vit d You know therefore drastically with regards to this kind of topic, forced me to be separately consider them coming from a lot of several angles. Its like individuals are not curious with the exception of it’s something regarding Kesha! Your special things awesome. All the time ensure that is stays right up!

  20. Appreciate it for this howling post, I am glad I observed this internet site on yahoo.

Leave a Reply

Your email address will not be published. Required fields are marked *