Chinese budget smartphone brand Realme has Southeast Asia, Africa and Europe in its sights after sweeping India

10-Jan-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Realme, the India-focused brand that shares the same owner as Chinese mobile phone maker Oppo, plans to expand its operations across Southeast Asia, Africa and Europe, following its success in the world’s second largest smartphone market.

It is a strategy made possible by the Shenzhen-based budget Android smartphone maker’s online distribution programme and independent business model, according to Realme global chief executive Sky Li Bingzhong in a recent interview.

“The company’s asset-light operations and focus on online sales allows it to keep costs low,” Li said. “That way, more young consumers can afford its products, which makes the brand more competitive in the market.”

He said Realme, which was founded in May last year, runs its own research and development unit as well as product planning and marketing teams, but partners with Oppo in smartphone production.

The brand’s international expansion initiative marks another example of how China’s major smartphone companies are taking a leaf out of the car industry’s playbook, as they introduce new devices under separate brands that target specific consumer segments around the world.

The push by Chinese mobile phone companies towards different segments of the smartphone sector has come at a time when their devices have squeezed those from international brands, such as Samsung Electronics, in the mass market segment.

Amid a saturated market in China, these firms have been growing their business in India, where the likes of Huawei Technologies, Xiaomi and Oppo invest resources in new brands.

Realme has been directly competing against certain handset models from Hong Kong-listed Xiaomi in the lower-end segment of India’s smartphone market.

Oppo, Vivo and OnePlus, are the mid- to high-end smartphone brands under privately held BBK Electronics Corp, a consumer electronics company headquartered in the southern Chinese coastal city of Dongguan in Guangdong province.

Realme, which was set up in May last year, has proven to be a formidable competitor in the budget smartphone segment in India, where demand for its handsets priced from 8,990 rupees (US$129) exploded last year.

Six months after introducing its first handsets in India, Realme became the second top-selling smartphone brand online during the country’s festive Diwali season, which ran from October 9 to November 8.

Realme sold 1 million smartphones during that period to grab an 18 per cent share of online sales behind Xiaomi’s 43 per cent and ahead of Huawei’s 8 per cent share, according to data from Counterpoint Research.

Li, a former vice-president at Oppo who led its overseas operations from 2013, said Realme’s rosy business prospects are based on its determination to supply competitively designed smartphones at affordable prices to tap into the demand from younger consumers. The Chinese budget smartphone brand estimated that it has more than three million users in India.

Realme has become a rival in India to Xiaomi’s Redmi budget smartphone line, which is priced below $150, according to Zaker Li, a Shenzhen-based senior industry analyst with IHS Markit.

More demand, however, will be needed by Realme to crack the upper echelon of India’s smartphone market. Xiaomi, Samsung, Vivo, Micromax and Oppo were the top five smartphone vendors in India in the third quarter, according to research firm IDC.

Still, Realme’s budget-friendly pricing and online sales strategy has enabled it to make inroads in Southeast Asia’s emerging economies, including Indonesia, Thailand and Malaysia.

During the expanded Singles’ Day promotion of Alibaba Group Holding on November 11, Realme topped smartphone sales on the Lazada Group’s e-commerce platforms across Southeast Asia, according to the smartphone brand.

New York-listed Alibaba is the parent company of Lazada and the South China Morning Post.

Realme’s Li said the brand’s performance in India and recent international expansion may eventually allow it to compete in China, the world’s biggest smartphone market.

That may be a longer term ambition. “Realme’s plan to return to China is unlikely to be achieved within a short period, as the domestic market is already too competitive,” IHS analyst Li said. “Realme will need a clearer product strategy if it is plans to come back home.”


Category: China

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