In the first half of 2018, the domestic mobile phone market shipped 196 million units, down 17.8 percent year on year, according to the national mobile phone sales data released by The China Information and Communications Institute. According to IDC’s global mobile phone market report, Huawei overtook Apple to become the world’s second largest smartphone market in the second quarter of 2018, according to Counterpoint Research, a leading market Research firm. Oneplus has a 40% share of India’s premium phone market, overtaking Apple and Samsung to become the country’s top premium phone brand.
Moreover, domestic phones are expected to account for 55 percent of the global mobile phone market this year. In recent years, domestic mobile phones shine brightly in the international mobile phone market, first emerged huawei, OV, Millet as the representative of the four, and now one more plus, the internationalization of domestic mobile phones has obviously been wider and wider. However, in sharp contrast to this, the global overall smartphone is in a sustained downturn, which can be described as both domestic and foreign fire and ice.
Global smartphone brands are beset by three big worries
Worldwide smartphone shipments totaled 342 million units in the second quarter, down 1.8% from 348.2 million units in the same period last year, marking the third consecutive quarter of declines, according to IDC. The global mobile phone market is in a slump for a number of reasons.
The main reason is that the global smartphone market is becoming saturated. In 2017, mobile phone shipments decreased by 0.5%. Both domestic and foreign markets (such as India and other emerging markets) entered the stage of stock competition. In addition to the reduction of mobile phone shipments, the agglomeration effect of mobile phone manufacturers is more obvious, and the market share of “OV Huami” in China is expected to break 82%; In addition, the 2017 White Paper on The Development of Smart Hardware Industry released by The China Academy of Information and Communication also points out that the domestic smartphone market is saturated. All these signs indicate that both overseas and domestic markets are becoming saturated and smartphone sales growth is sluggish.
The immediate cause is a general increase in the cost of mobile phones resulting in higher prices. ZDC data shows that the average price of China’s mobile phone market is still in a stage of significant rise. In 2017, the average price of mainstream mobile phones was 1,555 yuan, up 109 yuan from 2016 and 302 yuan from 2015. An important reason for the price hike is the increase in memory, camera light sensor components, capacitors and other mobile phone parts. In the already saturated mobile phone market, where growth is slowing, the sharp price increase further discourages consumers from buying handsets, resulting in a decline in handset shipments.
The underlying reason is that upgrades are getting smaller and smaller. Market saturation and price rise are only superficial reasons for the downturn in the mobile phone market. The main reasons are that the range of mobile phone upgrades is getting smaller and smaller. First, the hardware of mobile phones is fast reaching the limit of materials, and it is difficult to break through. Second, mobile phone manufacturers slow down the speed of mobile phone hardware upgrade.
There has been no epoch-making product for a long time. Although consumers’ desire to buy mobile phones has been improved due to the coming of the replacement cycle, it has been consumed by the smaller and smaller mobile phones upgraded, so the growth of the desire to buy mobile phones has been slower and slower.
The two have made OnePlus an international powerhouse
Despite the overall downturn in the international mobile phone market, shipments of domestic mobile phones decreased by only 176 million units, down 18.6 percent year-on-year. However, domestic mobile phones have achieved quite good results in the overseas, Huawei, Xiaomi strong performance in the international market, and the domestic niche brand One plus in the overseas also mix the wind rising water. It only took four years for OnePlus to establish a foothold in the overseas market, which is due to its unique advantages in two aspects.
products
Oneplus’s advantages are mainly reflected in the product pricing strategy, mobile phone system and mobile phone reputation.
Products are more competitively priced. Product price has always been the most concerned issue for consumers. Oneplus products are positioned at high-end mobile phones and rely on extreme cost performance to win. Apple and Samsung have always struggled to enter the high-end mobile phone market. Compared with apple and Samsung’s high price, OnePlus’s price is more affordable, with an average price of only around 3000 RMB. Oneplus has made its way to the TOP 1 position of high-end mobile phones in India with its high cost performance.
The system is simple yet simple. What OnePlus is most proud of is its hydrogen OS system (oxygen OS in foreign countries). Hydrogen OS retains the rich functions of the domestic mobile phone system, but removes the functions that are not commonly used, so that the system is rich and not bloated. Hydrogen OS also greatly retains the advantages of portability of android native system and adds more functions to enhance its playability, greatly improving user experience, especially for overseas users who are accustomed to native Android.
One plus has a good reputation. Good customer reputation is an intangible asset of an enterprise. Oneplus mobile phone has become the top high-end brand in India in just four years, which is due to its good customer reputation. The slogan of OnePlus is “no compromise”, and “only be the best Android flagship” is the product strategy that OnePlus has been adhering to for more than four years since its establishment. Adhere to the single-line boutique strategy, output products at the rate of 1-2 flagship boutique products every year. Only by striving for perfection can OnePlus win a good reputation, improve product competitiveness and bring more users.
Sales strategy
In terms of product sales strategy, OnePlus has its own uniqueness. It not only interacts online and offline, but also cooperates with global e-commerce giants like Amazon and local retail giants of Croma to realize the interaction between “Qianglong” and “Local snake”.
Deep cooperation with international e-commerce giant Amazon online. Oneplus has been able to make a rapid rise overseas, and amazon has helped it gain a foothold in India’s high-end phone market. In addition to providing a sales platform for OnePlus, Amazon also adjusted the purchase process for OnePlus users. Users need to activate the invitation code on the official website of OnePlus to make purchases. Oneplus mobile phones became the first brand of Amazon to change the rules. Oneplus’s partnership with Amazon has brought a lot of traffic to OnePlus and increased brand exposure.
Actively explore the offline market. Oneplus is expanding its offline footprint through a triple combination of offline experience stores, licensed stores and a partnership with Croma. Moreover, OnePlus will hold offline pop-up store activities after the release of new products, which strengthens the connection between OnePlus and consumers. This not only opens up offline sales channels for OnePlus, but also further increases consumers’ brand recognition of OnePlus. It is the product and sales strategy that make OnePlus ride the waves overseas.
A few happy and a few sad, one plus shortcomings remain
Although OnePlus mobile phone has achieved good results in the international market and has a first-class reputation in the industry, it still suffers from the common problems of lack of core technology, low product profits and low brand value of domestic mobile phones.
Lack of core technology. The lack of “core” and “soul” is not only a problem faced by OnePlus mobile phone, but also a high generalization of the whole Chinese mobile phone industry. “Core” refers to the chip, OnePlus mobile phone does not have its own chip, all rely on Qualcomm to provide chips, if the “ZTE” incident, then the blow to OnePlus mobile phone will be huge; “Soul” refers to the mobile operating system, there are only two mainstream operating systems, Android and iOS. But domestic mobile phones are using Android system, if one day Google for some reason to stop android licensing so one plus and domestic mobile phones will face disaster. Because there are alternatives to chips, but not systems. So the lack of core technology is not only a pain, but also the pain of domestic mobile phones.
Product margins are low. Oneplus mobile phone has been a high-end brand since its birth, and the average price of mobile phone is about 3000. However, OnePlus still does not get rid of the profit model of mobile phone hardware. Moreover, as every mobile phone of OnePlus insists on improving and is at the top level of the industry, the hardware cost is high. In addition, OnePlus mobile phones lack core technology and need to pay high patent fees in many fields, which leads to the low profit of onePlus products.
The two factors contribute to onePlus’s low profit margins. According to a recent report by market Research firm Counterpoint Research, Huawei’s profit margins are the highest for domestic phones at $15 per unit, followed by OPPO at $14 and Vivo at $13 per unit. Oneplus is not seen in the top three of the profit list, so it can be seen that the profit of OnePlus is less than $13 per unit. And in one plus one plus mobile CEO Liu Zuohu 6 conference said that if a mobile phone can do hardware 5% profit margin will be very moist, but calculate by each phone 3000 yuan, 5% of the profits of $21.78, much higher than one plus now below $13 profits, so the one plus the profit is low, not moist.
Brand value needs to be improved. Brand is not only the name card of an enterprise, but also a huge fortune of the enterprise. Although OnePlus mobile phone has experienced several years of development, it has a good reputation among users at home and abroad, and its popularity is also slowly improving. However, brand value is not only reflected in brand awareness, but also reflected in users’ recognition of the brand and users’ loyalty. For example, Apple mobile phone has been recognized by consumers both at home and abroad. User loyalty has always been the first brother in the mobile phone industry, which is the embodiment of brand value. Although foreign consumers have high recognition and loyalty to OnePlus brand, there is still a gap compared with high-end mobile phones like Apple, and the brand value still needs to be improved.
In addition, OnePlus also faces the problem of weak after-sales service. As OnePlus focuses on online channels, there are few offline stores and authorized stores, and the express delivery in India lags behind, resulting in the weak after-sales service of OnePlus.
One Plus still has to take a step at a time overseas
Since OnePlus has been recognized by the majority of overseas users and achieved good results, and its shortcomings are not obvious, it can make up for the shortcomings in product, marketing and after-sales service construction to pave the way for the further development of the international market.
In terms of products, innovation is needed to drive development, improve product rate and strengthen brand building to increase efficiency and consolidate capital. Oneplus can make up for the pain of lack of innovation by increasing technological input and continuously improving user experience. Innovation-driven development can also reduce product costs and improve product profit margins, so that OnePlus has more funds to invest in the research and development of new products, forming a virtuous cycle. In order to improve the backward brand construction, we can improve the brand value from two aspects. On the one hand, we can continue to take the high-quality route, accumulate a better reputation, and use the word of mouth of consumers to win the recognition of consumers, so as to improve the brand value. On the other hand, we can strengthen the brand publicity in foreign countries, maintain cooperation with local giants, and use their influence to enhance brand awareness.
In terms of marketing, OnePlus not only needs to actively explore new markets, but also needs to strengthen the construction of sales channels. At present, in addition to India, the emerging mobile phone market also includes Africa, Southeast Asia and Latin America. These mobile phone markets are underdeveloped, which will not only have much less competition, but also have very strong demand. In terms of sales channel construction, the focus can still be placed on the online, cooperating with Amazon and local e-commerce giants to open up sales channels with their resources, and cooperating with local operators or retail giants and other high-quality brands offline to further expand sales channels.
In after-sales service, a need to greatly strengthen the after-sale service, but one plus overseas mainly go online channels, and emerging markets express industry development is relatively lagging, need one plus through cooperation with the local operators and retail giant set up after-sales service station, can not only ensure after-sales service coverage area, and can avoid the emerging mobile phone market rapid development lag behind.
summary
Domestic products should be strong, although one plus, Huawei, OV, Millet and other domestic mobile phone manufacturers in the international mobile phone market strong performance, occupy half of the international mobile phone market, but we should clearly understand that only master the core technology, in order to obtain more profits, in order to promote the development of China’s entire mobile phone industry. To go from manufacturing power to manufacturing power.
Article/Liu Kuang public account, ID: Liukuang110